(MENAFN- AFP) European stock markets rebounded Tuesday, led sharply higher by banking shares boosted by signs of waning chances that Britain will vote to leave the European Union next month.
Wall Street stocks also had a good day, riding on the European rally, with technology and financial shares benefitting especially from greater confidence in the US economic outlook.
In the US, investors had been troubled by the prospects of a Federal Reserve interest rate increase, but "now they're starting to embrace it," said Charlie Bilello of Pension Partners. "It means the economy is doing a bit better."
The S&P 500 advanced 1.4 percent and the tech-rich Nasdaq gained 2.0 percent.
In Europe, London's benchmark FTSE 100 index climbed 1.4 percent. Frankfurt's DAX 30 index rose 2.2 percent and the Paris CAC 40 jumped 2.5 percent.
- British pound gains -
The British pound pushed higher against the dollar and the euro.
"Opinion polls have shown a growing likelihood of the outcome siding with the camp that wants Britain to renew its membership in the club shared by more than two dozen European nations," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
Analysts also cited a forceful appearance by Bank of England governor Mark Carney before a parliamentary committee in which he highlighted the economic risks of Britain voting to exit the 28-nation bloc.
Investors brushed off a survey showing that investor confidence in Germany fell unexpectedly in May as uncertainty over a possible Brexit overshadows better-than-expected economic data.
Other economic reports were solid. Data showed the German economy, Europe's biggest, grew at its fastest rate in two years in the first three months of 2016, driven primarily by rising investment and household spending.
Commerce Department figures showed US new-home sales in April surged to their best level since January 2008 despite a hefty rise in median prices.
Financials surged higher. Shares in Barclays climbed 3.2 percent and RBS jumped 4.8 percent in London, while in Paris, BNP Paribas rose 3.7 percent and Societe Generale shot up 5.4 percent. In Frankfurt Deutsche Bank gained 2.6 percent and Commerzbank added 2.7 percent.
In the US, leading banks such as JPMorgan Chase, Bank of America and Citigroup rose 1.5 percent or more.
US agricultural giant Monsanto climbed 3.1 percent after it rejected a $62 billion takeover bid by Germany's Bayer AG as too low, but said it was willing to entertain further talks on a merger.
Earlier, Bayer had risen 3.2 percent on unconfirmed reports of Monsanto's coming rejection. Monsanto's statement was released after the Frankfurt market closed.
- Key figures around 2100 GMT -
New York - Dow: UP 1.2 percent at 17,706.05 (close)
New York - S&P 500: UP 1.4 percent at 2,076.06 (close)
New York - Nasdaq: UP 2.0 percent at 4,861.06 (close)
London - FTSE 100: UP 1.4 percent at 6,219.26 (close)
Frankfurt - DAX 30: UP 2.2 percent at 10,057.31 (close)
Paris - CAC 40: UP 2.5 percent at 4,431.52 (close)
EURO STOXX 50: UP 2.6 percent at 3,010.12 (close)
Tokyo: Nikkei 225: DOWN 0.9 percent at 16,498.76 (close)
Shanghai - Composite: DOWN 0.8 percent at 2,821.67 (close)
Hong Kong - Hang Seng: UP 0.1 percent at 19,830.43 (close)
Euro/dollar: DOWN at $1.1141 from $1.1219 on Monday
Dollar/yen: UP at 109.99 yen from 109.25 yen
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