European bourses climb as traders put Libya crisis to back of their minds

European bourses continued to reclaim lost ground on Tuesday with the FTSE 100, DAX and CAC all climbing between 0.5%-0.8% in early trading, led chiefly by demand in heavyweight mining shares.

Investor concerns regarding the crisis in the Middle East and North Africa seem to have abated of late, a fact helped no end by the somewhat stabilising of crude oil prices. Should crude prices continue to consolidate, this may open up potential for stronger equity moves as traders readdress valuations.

Data out from China showing that Chinese manufacturing grew at its slowest pace in six months has helped to encourage higher demand for shares of heavyweight mining companies. The slowdown in activity is helping to convince traders that China’s efforts to cool spiralling inflation could be working and that a normalisation of activity and growth in the region is getting closer. This has helped to trigger a fourth day of straight gains for the mining sector, with heavyweight stocks such as Fresnillo, Lonmin and Rio Tinto all gaining between 1%-2%.

An annual letter written by Warren Buffett, the Oracle of Omaha, to shareholders of Berkshire Hathaway maintaining the need for more major acquisitions and that his elephant gun is fully loaded and he has an itchy trigger finger, continues to sit well with traders. Mr Buffett is widely followed in the market place and his bullish comments have resonated with a similarly bullish tone from investors and traders alike.

HSBC’s shares continue to weigh on the market, however, with the hangover from yesterday’s disappointing results still making an impact on today’s trade. Downgrades in ratings on the stock from UBS and Deutsche Bank have also weighed on sentiment, forcing shares in HSBC lower by another 1.6% to add to yesterday’s loss of 4.6%.

A testimony by Ben Bernanke to the Senate Banking Committee is also likely to gain focus in the afternoon’s session as will US economic data including ISM Manufacturing and Construction Spending, both out at 3pm GMT.