FTSE 100: 2.13%
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Cac-40: 2.37%
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Stoxx 600: 1.97%

European equities rocketed to a 19-month high Wednesday after the US breathed a sigh of relief as they reached a budget deal.

Lawmakers passed a bill Tuesday that avoided most tax hikes and postponed spending cuts by raising taxes for higher earners.

The legislation brought an end to a year-long impasse over how to avert the so-called fiscal cliff.

President Barack Obama will sign off the bill after the House voted 257-167.

"Thanks to the votes of Democrats and Republicans in Congress I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing a middle-class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America," he said in a press conference.

However, the bill has left a number of problems unresolved with some strategists saying it was merely a short-term fix which did nothing to prevent future budget conflicts.

Swedish regulator cracks down on traders

The Swedish Financial Supervisory Authority will step up pressure on traders who break rules that require them to report company bond prices.

The watchdog will crack down on corporate debt traders to abide by existing rules in a bid to improve transparency in a growing market.

Traders will have to file trade reports including volumes and closing prices no later than 9:00 the following day.

The krona strengthened 0.23% at 6.4877 to the dollar at 16:30 Wednesday.

Market shakers

Lamprell shares soared 21% to 113.5p, its highest in six weeks, after the oil rig maker received banking waivers for its debt facilities. The company said it had succeeded in negotiating waivers to its banking covenants which were due to be tested on December 31st.

Silence Therapeutics shares rose 10.29% to 4.82p after the medical company announced the appointment of Chief Medical Officer Michael Khan who will oversee a cancer research project.

Mining heavyweight Rio Tinto Group gained 5.4% to 3,700.00p, the highest price in 10 months.

Automaker Volkswagen climbed 3.26% to €168.20 as Chinese manufacturing expanded for a third month in December.

ArcelorMittal rose to its highest in 11 weeks after selling a stake in its Canadian unit for $1.1bn. The world's biggest steelmaker increased 4.4% to €13.505.

Euro falls against dollar

The euro dropped 0.07% to the 1.3195 dollar despite a positive start to the day.

Front month Brent crude futures increased 1.130 to 112.370 on the ICE.



RD

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