By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rose on
Wednesday, as investors welcomed a better-than-expected report on
euro-zone industrial production.
Also of interest in the region, Germany's constitutional court
continued its two-day hearing on the legality of the European
Central Bank's bond-buying program, the Outright Monetary
Transactions, or OMT program.
The Stoxx Europe 600 index added 0.5% to 293.13 after sliding
1.2% on Tuesday.
Shares of Kabel Deutschland Holding AG rallied 8.4% after
Vodafone Group PLC (VOD) confirmed it has made a preliminary
approach about making an offer for the German TV and Internet
provider. Shares of Vodafone dropped 0.8%.
Volkswagen AG gave up 2.3% after the car maker recalled almost
26,000 vehicles in Australia due to faulty gearboxes.
Investors also focused on the euro-zone industrial-production
data, which showed a 0.4% improvement in April, beating
expectations of a flat to 0.1%-rise reading.
"The only negative element to this report is the distribution of
out-turns at the national level, with the only material growth
impulses coming from Germany and France while the rest of the major
euro-area economies recorded much more lackluster figures," said
James Ashley senior economist at RBC Capital Markets, in a
note.
"In other words, of course it is positive news that the
euro-area industrial sector has now managed to eke out three months
of growth, but the heavy reliance on a single economy leaves the
region vulnerable to any slowdown that might befall Germany. But,
for now, we'll take what we can get and localized growth is better
than no growth," he added.
In Germany, the final day of a two-day hearing about the ECB's
unlimited bond-buying program got under way. Executive board member
of the ECB Jörg Asmussen said at the hearing on Tuesday he was
"firmly convinced that introducing the OMT program was the right
thing to do to ensure price stability in the euro area. After all,
a currency can only be stable if its continued existence is not in
doubt."
Meanwhile, Bundesbank President Jens Weidmann said unlimited
bond purchases would infringe the ECB's mandate. The Bundesbank has
earlier criticized the OMT program for creating moral hazard and
taking pressure off errant governments. Read: Just say no to ECB
bond-buying.
Among notable movers on Wednesday, shares of HeidelbergCement AG
lost 3.7% in Frankfurt after Morgan Stanley cut the firm to equal
weight from overweight.
The DAX 30 index , however gained 0.1% to 8,232.11.
France's CAC 40 index rose 0.5% to 3,828.99, with shares of oil
giant Total SA (TOT) up 0.5%.
The U.K.'s FTSE 100 index rose 0.1% to 6,347.32.
Greek stocks bucked the positive trend on Wednesday, after
equity index provider MSCI Inc. (MXB) lowered the country to
emerging-market from developed status. Adding to Greece's woes, the
government shut down its state broadcaster, the Hellenic
Broadcasting Corporation (ERT), triggering protests outside the
firm's headquarters.
The Athex Composite lost 1.5% to 882.49.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires