European stocks tested multi-month highs Wednesday after better-than-expected business sentiment data from Germany and an upgrade to the fourth quarter pace of growth in the United Kingdom.
Britain's FTSE 100 added around 14 points by 10:00 GMT after solid earnings from one of the country's biggest banks and an upward revision to fourth quarter economic growth from the Office for National Statistics, which said GDP advanced at a 0.7% clip in the final three months of last year, up 0.1 percentage points from its initial estimate.
Lloyds Banking Group (LYG) - Get Lloyds Banking Group plc Sponsored ADR Report posted its strongest full year profits since the global financial crisis Wednesday and boosted it annual dividend to around £2.2 billion, lifting shares more than 3.7% to 69.2 pence each, the highest since the country voted to leave the European Union on June 23.
Germany's DAX index gained 30 points, or 0.26%, to trade within a whisker of the 12,000 mark, a level it hasn't breached in nearly two years.
Germany's top business leaders painted an upbeat picture Wednesday as a key sentiment indicator matched the highest level four years amid improving prospects in Europe's biggest economy.
The Ifo Institute's benchmark Business Climate Index was measured at 111.0 in February -- matching a four-year high -- and well ahead of the 109.6 reading forecast by analysts and up from a 109.8 reading in January. The Institute's survey of current conditions for the 7,000 company executives remained steady at 116.9 points against a forecast of 116.7 while the index of expectations for the next six months improved to 104.0 from 103.2 in the previous month.
The optimistic data offset a sharp fall for Bayer AG (BAYRY) - Get Bayer AG Report , which led DAX decliners after the drugmaker posted solid full-year earnings but said its crop sciences unit would only see modest growth in 2017 as it completes its $66 billion takeover of Monsanto Co. (MON)
Bayer said group sales rose 1.5% to €46.8 billion last year against net income of €4.5 billion and core earnings per share of €7.32 per share. However, the Leverkusen-based group said it sees a "volatile" environment for the world seed and crop protection market next year and mid single-digit earnings growth for the company overall.
Bayer shares fell to around 2.7% in Frankfurt to change hands at €105.88 each, trimming the three month gain to around 15%.
Overnight in Asia, stocks around the region extended gains after a solid session on Wall Street, with the MSCI Asia ex-Japan index rising 0.55% by 06:45 as investors took advantage of a modest pullback in the U.S. dollar and focused on increasing signals of robust growth in China. Japan's Nikkei 225 bucked the regional trend, closing around 0.01% lower at 19, 379.87 points.
The dollar slipped marginally in Asia trade, as investors pared bets of a March rate hike from the Federal Reserve after relatively dovish remarks from Philadelphia Fed President Patrick Harker, before recovering as European trading kicked off.
The dollar index, which measures the currency against a basket of six trading peers, was marked 0.23% higher at 101.55 by 10:00, a move which kept a lid on global oil prices as traders rolled into new delivery contracts amid the ongoing debate between rising U.S. production and OPEC production cut discipline.
WTI futures for April delivery were marked 0.8% lower at $53.97 per barrel while Brent contracts traded at $56.35 per barrel.
Wall Street returned from the long holiday weekend with enough energy to push stocks to new records for their second session in a row.
The Dow Jones Industrial Average increased 0.58% to close at 20,743, capping off its eighth straight day of gains following a better-than-expected quarter from Walmart (WMT) - Get Walmart Inc. Report .
A rally in the energy sector pushed the rest of the markets higher with the S&P 500 rising 0.60% to 2,365, a new record, and the Nasdaq climbing 0.47% to 5,865, also a fresh high. The latter's recent gains are the one to watch, said Helene Meisler of Real Money, our premium site for active investors, who pointed out that the tech-heavy index has not had consecutive down days in 2017.
Early indications from U.S. futures prices suggest further gains at the opening bell for the Dow, although both the S&P 500 and the Nasdaq are currently pricing in modest declines.