European Shares Climb on Hopes for German Coalition Deal

TOKYO (AP) -
Men walk past an electronic stock board showing Japan’s Nikkei 225 index and other countries’ indexes at a securities firm in Tokyo Tuesday. (AP Photo/Eugene Hoshiko)

European shares were higher Tuesday following a downbeat day in Asia, after German Chancellor Angela Merkel said her Conservative bloc was willing to discuss forging a “stable government” with the Social Democrats.

France’s CAC 40 gained 0.3 percent in early trading to 5,377.54, while Germany’s DAX added 0.3 percent to 13,033.67. Britain’s FTSE 100 edged up nearly 0.2 percent to 7,396.45. U.S. shares were set to drift higher, with Dow futures up 0.1 percent at 23,593.00. S&P 500 futures were also up 0.1 percent at 2,603.90.

Merkel said Monday her Conservative bloc was willing to start talks on trying to forge a “stable government” with the Social Democrats, with an eye on the large challenges Germany faces both internationally and domestically. The Social Democrats, Merkel’s partners in the outgoing government, initially refused to consider another so-called “grand coalition” after disastrous election results. But following an appeal from the country’s president they reversed course Friday and said they were open to holding talks.

European “bulls have more reasons to stay bullish. The foremost, raising hopes of the German political deadlock will be resolved soon, Chancellor Merkel struck a chord with the former ally Social Democrats,” Rob Carnell of ING said in a commentary. “Among others reasons are likelihood of improved Eurozone economic activity and inflation,” he said.

Japan’s benchmark Nikkei 225 was nearly unchanged at 22,486.24. Australia’s S&P/ASX 200 lost nearly 0.1 percent to 5,984.30. South Korea’s KOSPI added 0.3 percent to 2,514.19. Hong Kong’s Hang Seng was little changed, slipping less than 0.1 percent to 29,680.85, while the Shanghai Composite recovered to 3,333.66, up 0.3 percent. Shares in Southeast Asia were mixed.

Benchmark U.S. crude dropped 33 cents to $57.78 a barrel in electronic trading on the New York Mercantile Exchange. It fell 84 cents to settle at $58.11 per barrel on Monday. Brent crude, used to price international oils, declined 18 cents to $63.20.

The dollar rose to 111.27 yen from 111.11 yen. The euro strengthened to $1.1905 from $1.1897.