European stocks reversed earlier losses Tuesday closing slightly higher after Greece managed to avoid defaulting on a 5.0 billion euro tranche of public debt and as results at US home improvement giant Home Depot indicated further evidence of a turnaround in the American housing market. Markets were also boosted by reports in the German press that Greece may receive a large dollop of financial assistance in order to help it buy more time with its restructuring program.
In terms of markets, Italys FTSE MIB ended the day up 1.4%, at 15,333.10, while Spains IBEX-35 rose 1.7% to 7,693.
Lifting Milan shares were banking giants Unicredit and Intesa Sanpaolo. Unicredits latest three-month earnings were higher than market expectations.
Foods group Parmalat and eyewear giant Luxottica also closed higher Tuesday, while luxury goods giant Tods slipped over 6% after releasing its nine-month results. The other main continental markets, Germany and France, closed marginally higher, with Frankfurts DAX edging up 0.01% to 7,169 and Paris CAC 40 up 0.56% to 3,430. Londons FTSE 100 closed up 0.33% at 5,876, while Greeces ASE Composite index advanced 0.4% to 775.72.
Meanwhile the spread between Italys 10-year benchmark bond and its German equivalent an indicator of how investors view the prospects of Italys economy closed at 362 basis points, slightly lower than Mondays closing of 368 basis points.