Stocks push higher on EU Summit optimism miners and banks lead

European stocks pushed higher in trading on Wednesday morning as investors continue to show signs of optimism that the EU Summit will be productive with a greater role of the ECB and a bazooka style package to contain the debt crisis.

Gains in mining firms, which has derived strength from a 1% gain in the price of copper and a stronger reading of Australian GDP, is helping to provide much of the energy behind today’s early 1% rally in UK stocks.

By the first 30 minutes of trading, the FTSE 100 had rallied 62 points or 1.1%, whilst the German DAX had seen gains of 1.6% with the French CAC the strongest EU Index at +1.7%.

Banks also saw a bounce after yesterday’s weakness. The FTSE 350 banking sector rallied 1.65% in early trade, with stocks such as Barclays and Lloyds Banking Group amongst the top 10 rising stocks on the FTSE 100 by percentage this morning. Both stocks saw early gains of 2%.

Investors will watch data out of the UK and eurozone this morning in the form of industrial production. UK industrial production is expected to fall 0.3% from a previous unchanged month, and this could pile more pressure on the potential for the UK to slip into another recession. The UK production data is released at 9.30am. German industrial production is expected to bounce back in October, with a growth of 0.4% after a previous month’s fall of 2.7%. German production data is expected at 11am London time.

Traders will also keep a firm eye out for the results of a German bond auction this morning, as the European powerhouse auctions off five-year debt.

Company reporting is thin on the ground today but two firms standout; Stagecoach and Kesa Electricals.

Stagecoach shares surprisingly rallied 2% in early trade despite the company reporting a bigger than expected drop in first half profits before tax. The travel company reported profits before tax fell to £88.7 million for the first half of the year, a drop of 17% which was worse than the £95 million consensus estimates by most analysts. The drop in profits was mostly weighted behind a £6.9 million operating lost at the firm’s UK rail division, where losses in its East Midland Trains scuppered much of the first half year’s performance. The CEO was however confident that their trains division would bounce back in the second half and perhaps today’s 2% rally in share prices is evidence of shareholder confidence that they can deliver a bounce back.

Stagecoach’s shares have been largely in a consolidation pattern since April, trending sideways between the 235p to 260p range, having seen a gain of 14% on the year to date, largely outperforming benchmark EU indices.

Kesa Electricals shares fell over 1% in trading after the firm reported a first half adjusted loss, before tax, of €13.6 million after a profit of €25 million a year earlier. The loss is no surprise considering the expected losses incurred at the sale of its Comet business for £2 million to OpCapita.