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European Shares Cut Losses on Boehner Comments

CNBC.com with Reuters
Wednesday, 28 Nov 2012 | 11:36 AM ET

European shares pared losses in afternoon trading on Wednesday to close higher after U.S. House Speaker John Boehner said he was optimistic that a deal on the U.S. "fiscal cliff" of tax rises and spending cuts could be reached.

Debate continues to rage between Republicans and Democrats over how to overcome the forthcoming "cliff" of sharp tax increases and spending cuts, which could result in a more than $500 billion hit to the economy.

(Read More: What is the "Fiscal Cliff")

The FTSEurofirst 300index of top European shares provisionally closed 0.2 percent higher at 1,109 points after falling to a low of 1,100.79 earlier in the session.

Earlier shares fell after the Financial Times reported that euro zone governments could be forced to accept losses on their loans. The newspaper cites documents that showed Monday's late-night deal had left a gap in Greece's new debt targets.

Spain's IBEX 35 Index did not manage to close in positive territory however. The index suffered losses on Wednesday as bank stocks fell after the European Commission announced details of a bank restructuring plan. Nearly 40 billion euros will be disbursed to struggling lenders but the plans also mean bondholders will face losses. Bankia , NCG Banco, Catalunya Banc nd Banco de Valencia re all part of the recapitalization scheme.

In France, President Francois Hollande met with akshmi Mittal, owner of steel giant ArcelorMittal, on Tuesday and urged him to guarantee the long-term future of workers at one of the group's plants in northern France. The shares fell on reports Hollande threatened to nationalize one of the company's steel plants over a dispute over job losses. New data showed unemployment in France is at its highest level in 14 years.

MegaFon, Russia's second largest mobile phone firm, launched its initial public offering (IPO) in London on Wednesday. The company, controlled by Russia's richest man, Alisher Usmanov, priced its stock market float at $20 which was at the lower end of its guided range of $20-$25 per share.

United Utilities released first-half earnings showing a rise in pre-tax profits; shares closed 2.9 percent higher.

Shares in Arm Holdings closed 1.9 percent higher after reports in London's Daily Mail said that Intel was interested in purchasing the tech firm.

Also on Wednesday Swiss LifeHoldings announced job cuts and a writedown of its German unit; shares in the group fell.

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