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Europe Stocks Open Higher on Euro Deal Relief

European stocks opened higher on Thursday after European leaders agreed to boost the bailout fund for struggling euro zone nations and struck a deal with private bondholders that they would take a 50 percent haircut on Greek government debt.

Close-up of a pen on stock price chart
Close-up of a pen on stock price chart

The FTSE rose 1.7 percent, the DAX in Frankfurt opened up 3.3 percent and the CAC 40 rose 2.5 percent.

Agreement over a write-down of Greek government debt was the last element to be agreed after leaders confirmed the European Financial Stability Facilitywould be leveraged to the tune of $1.4 trillion and the region's banks must raise around 106 billion euros ($146 billion) in capital by the end of June 2012 to restore confidence in the sector.

The Hang Seng led Asian indexes following the news with a 1.5 percent gain, while the Nikkei and Shanghai Composite rose by around 0.6 percent.

Italy managed to ease some concerns late on Wednesday after Prime Minister Silvio Berlusconi sent a letter to European leaders outlining plans to balance the country's budget by way of a number of reforms and austerity measures.

However, Berlusconi later called an Italian television show to criticize the European Central Bank, telling viewers: "The euro is a currency without a central bank behind it to guarantee it," he blamed the institution for Italy's sovereign debt troubles, according to Dow Jones.

Berlusconi also dismissed rumors that he had reached an agreement with coalition allies to resign early next year in return for their support on pension reforms.

Thursday will be dominated by earnings data out of Europe, with a number of leading firms reporting their third quarter results.

Global oil and gas firm Royal Dutch Shell is set to release third quarter trade data on Thursday and Norwegian energy company Statoil is also due to report.

From France, Areva , Renault and France Telecom will announce their quarterly results.

German carmaker Daimler saw earnings before interest and tax fall by 19 percent to 1.97 billion euros ($2.7 billion) in the third quarter. Daimler said the luxury car business had been hit by the downturn in Europe.

BASF reported better-than-expected earnings before tax of 1.96 billion euros ($2.71 billion), against a Reuters forecast of 1.89 billion euros ($2.64 billion), but warned that growth had slowed since the first half of 2011 and the trend looks set to continue to the end of the year.

Lufthansa announced third quarter operating profit of 575 million euros, missing forecasts, and the airline said it expects year-on-year operating profit to fall in 2011, but revenues in the passenger airline business are predicted to rise.

German drugs and plastics producer Bayer saw revenues rise by 1 percent to 8.67 billion euros, in line with expectations. While EBITDA for the group rose 8.5 percent to 1.81 billion euros ($2.50 billion), exceeding expectations of around 1.66 billion euros.

Volkswagen will release its earnings data later on Thursday morning at around 9:00 UK time.

British pharmaceutical firm AstraZeneca and software company Autonomy will also report earnings on Thursday.

Many of the world's leading economists and policymakers will meet for a pre-G20 seminar in Paris on Thursday, with former British Prime Minister Gordon Brown, WTO head Pascal Lamy, Google CEO Eric Schmidt and economist Nouriel Roubini all expected to attend.

In Ireland, presidential elections will take place with non-acting Deputy First Minister of Northern Ireland, Martin McGuinness standing as a candidate for Sinn Fein.