European stock markets posted strong gains on Tuesday as uncertainty over the U.K.'s political scene diminished following news of the imminent appointment of Home Secretary Theresa May as U.K. prime minister. The pan-European Stoxx 600 index was trading around 1 percent higher with most sectors in positive territory. London's FTSE index saw marginal gains during trade, with a rise in homebuilder and banking stocks failing to lift the overall index; Taylor Wimpey was trading up over 3 percent, Barratt Developments up 3 percent and Barclays up over 3.5 percent. U.K. homebuilders are seeing a resurgence following news that Theresa May will become the next U.K. prime minister on Wednesday, removing some of the political uncertainty following the country's vote last month to leave the European Union (EU). Elsewhere in U.K. news, the Bank of England's governor, Mark Carney and other members of the bank's Financial Policy Committee have been questioned by the Treasury Select Committee on Tuesday, following allegations that the central bank crossed the line of independence in the run-up to the U.K.'s vote on leaving the EU. During the meeting, Financial Policy Committee member Richard Sharp said there was absolutely no 'startling dishonesty' nor 'peddling of phony forecasts' by the bank, despite what critics had suggested. While the FTSE 100 showed signs of slight pressure, sterling climbed during Tuesday's session, up 1.2 percent against the dollar at 2.40 pm U.K. time, at $1.3145. Oil rebounds while autos accelerate Energy continued to be a key focus among investors, as both Brent and U.S. crude posted gains of above 2.5 percent each, boosted by weakness in the U.S. dollar. Brent and U.S. crude were trading around $47.80 and $46.00 respectively at 2.40 pm U.K. time. Meanwhile, Europe's best performing sector was autos, posting gains of as much as 4 percent. German automaker Daimler jumped over 4.5 percent after it posted a strong set of second quarter earnings, with Mercedes Benz vans helping boost the bottom line while margins for cars and trucks exceeded expectations. Other automakers helped prop up the sector, including Peugeot, BMW and Renault, which were all sharply higher. Shares of retailer ASOS were up over 4 percent after the retailer issued a trading statement in which it forecast that its full-year sales growth would be at the upper end of its guidance. One of Tuesday's biggest losers was Norwegian lender DNB, off over 9 percent, after it warned of higher loan losses in 2016; with weaker oil prices weighing on the company, according to Reuters. In Asia, markets finished higher on Tuesday, as Japan shares surged as investors digested stimulus comments made by Japanese Prime Minister Shinzo Abe late on Monday, helping to weaken the yen. After his ruling coalition government did well in parliamentary elections at the weekend, Abe said that he planned to make "bold investment into seeds of future growth," Reuters reported. The news out of Japan helped boost U.S. stocks in trade, along with higher oil prices. Italian banks soar Meanwhile, at a meeting of the Eurogroup of euro zone finance ministers on Monday, Italy was warned to play by the rules when it comes to bank bailouts. Italy wants to use public finances to recapitalize its ailing banks but that would break European banking rules that require creditors to take losses too. Eurogroup head Jeroen Dijsselbloem said on Monday that restrictions are clear when it comes to bank bailouts. Italian banks were outperforming their fellow lenders, with UniCredit up over 11 percent. This comes after the bank revealed that it had successfully placed 10 percent of its online broker FinecoBank at 5.40 euros per share, enabling it to pocket 328 million euros, according to Reuters. The sharp rise in UniCredit, boosted other Italian lenders including Mediobanca, UBI Banca and Intesa Sanpaolo, which were all above 6.5 percent each. Source: CNBC
