-Italy Treasury hits higher end of targets at sovereign debt auction
-German consumer confidence increases
-Spain reduces its budget deficit as it tackles financial crisis


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European equities bounced up Wednesday as Italy met the high range of its targets at a sovereign debt auction and German confidence grew.

The Italian Treasury sold a total of €6.5bn in public debt, compared to its objective of €4-6.5bn, despite the political turmoil over election results which produced a hung parliament.

Demand, measured by the bid-to-cover ratio, also increased to 1.61 from the previous 1.3.

It comes as the country tries to solve its election crisis. Centre-left coalition leader Pier Luigi Bersani won the lower house by less than a half a point. Former Prime Minister Silvio Berlusconi, who promised to reverse austerity measures, won a blocking minority in the Senate.

However an Italian government requires a majority in both houses.

In the latest news, Beppe Grillo of the populist movement rejected a call by Bersani to back a coalition.

Bersani's bloc needs to bring Grillo on board or join with Berlusconi in order to take the helm.

On a brighter note for the Eurozone, German consumer confidence for March rose to 5.9, in line with expectations, compared to 5.8 the earlier month, according to GfK figures.

The Eurozone´s economic confidence index for the month of February improved to 91.1 points versus 89.5 in the month before (Consensus: 89.9).

Spain's deficit lower but recession continues

Spain's recession will continue in the first quarter of 2013 following a contraction of 0.7% in the last quarter of 2012, according to the Bank of Spain's Economic Bulletin.

The central bank explained the limited information for the first quarter pointed to a continuation of economic contraction in a context of sluggish internal demand.

In a separate report, the country's Prime Minister Mariano Rajoy said the country's 2012 budget deficit was 6.7% of gross domestic product (GDP), 40 basis points above the target established with the European Commission.

He told parliament the structural budget deficit was lowered by 3.5 percentage points last year.

Kabel Deutschland hit by halted Vodafone takeover reports

Kabel Deutschland's shares plunged following reports Vodafone had put on hold a bid to take over the German cable operator after leaks of a potential deal complicated internal talks.

French construction-to-telecoms conglomerate Bouygues advanced after announcing a 41% drop in 2012 net profits, to €633m, which beat analysts' expectations.

European aeronautics giant EADS surged after saying it expects higher profit in 2013.

Switzerland's biggest life insurer Swiss Life Holding AG jumped after posting a higher operating profit in its home market and France.

Royal Imtech NV dropped to the biggest decline on the Stoxx 600 after reporting a €500m rights offer to help cut debt.

Other asset classes tumble

The euro/dollar slid by 0.08% to the 1.0253 dollar mark.

Front month Brent crude futures fell by 0.303 dollars to the 112.370 dollar per barrel mark on the ICE.

RD

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