(MENAFN- AFP) Europe's main stock markets pushed higher on Tuesday but the euro hit a one-year dollar low, as investors eyed European Central Bank stimulus hopes and shrugged off geopolitical fears over Ukraine.
Nearing midday, London's benchmark FTSE 100 index added 0.14 percent to 6,835.07 points, Frankfurt's DAX 30 index won 0.88 percent to 9,562.11 points and the Paris CAC 40 gained 0.42 percent to 4,397.98 compared with Monday's close.
The euro sank to $1.3115 - a level last seen on September 6, 2013 - on expectations of monetary easing measures from the European Central Bank (ECB) this Thursday.
- ECB eclipses Ukraine -
"Excitement surrounding the ECB eclipses the situation in Ukraine," said IG analyst David Madden.
European equities had finished on a flat note on Monday, held down by concerns over the Ukraine crisis and by weak manufacturing data.
Eurozone inflation eased to 0.3 percent in August, raising concerns the 18-nation single currency bloc is about to tip into deflation.
The data has put pressure on the ECB to take fresh monetary easing steps at its policy meeting Thursday, a move that would weigh on the euro.
"Investors are holding onto the outside prospect that the ECB might announce further steps to help boost growth and demand later this week ... and this appears to be outweighing any concerns about the war between Ukraine and Russia, thus limiting the downside for now," said CMC Markets analyst Michael Hewson.
French President Francois Hollande and ECB head Mario Draghi have agreed that European demand must be lifted to head off a risk of deflation, French officials said.
The ECB had already slashed its key interest rates to record lows and made huge volumes of ultra-cheap cash available to banks in a bid to kick-start lending in the single currency area.
Back in London, shares in Tesco rebounded 1.78 percent to 229.562 pence.
The British supermarket giant - the world's third-biggest retailer - clawed back some of the recent heavy losses that followed a dire profits warning on Friday.
In Paris, industrial giant Legrand saw its share price soar following a broker upgrade from Bank of America-Merrill Lynch.
Legrand shares surged 4.18 percent to 43.85 euros, topping the risers board on the French stock market.
Markets mostly rose in Asia on Tuesday, with Tokyo gaining more than one percent as the yen sank against the dollar, while Shanghai was also boosted by hopes China will introduce economy-boosting measures.
With Wall Street closed for the Labor Day weekend Asian investors were given an anaemic lead from Europe.
- Asia mostly climbs -
However, Tokyo rallied 1.24 percent as the dollar edged towards the 105 yen level not seen since the start of the year. A weaker yen boosts exporters.
Sydney stocks meanwhile gained 0.51 percent to close at a six-year high, and Shanghai jumped 1.37 percent, while Hong Kong finished flat.
In London currency deals on Tuesday, the dollar climbed to 104.90 yen - the highest level since mid-January - as dealers bet on looser monetary policy from the Bank of Japan, analysts said.
The euro later recovered slightly to stand at $1.3119, down from $1.3129 late in New York on Monday.
The single currency increased to 79.31 pence from 79.05 pence late in New York on Monday, while the pound dipped to $1.6539 from $1.6608.
The price of gold fell to $1,276.07 an ounce, from $1,286.50 on Monday on the London Bullion Market.
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