European equities buoyed by Portugal auction
London - European stocks rose and the euro was steady on Wednesday after Portugal got through a key bond auction unscathed and on hopes policymakers will boost a rescue fund designed for debt-scarred euro zone countries to tap.
Globally, equities were higher, led by emerging markets and generally boosted by hopes for a solid earnings season. The dollar was flat against a basket of major currencies.
Wall Street also looked set to open higher.
Investors focused early on Lisbon's first bond auction of the year, in which it sold the maximum amount it had targeted, with yields falling on the 10-year issue but rising in the five-year sector.
Next in sight is Spain, which is also under scrutiny over debt servicing. It is seeking to sell up to 3bn euros of bonds at an auction on Thursday.
Markets are keen to see if debt-strapped countries can fund themselves at a sustainable cost or be forced to turn to the European Union and IMF for financial aid in the same way that Ireland and Greece did last year.
The region's finance ministers are likely next week to consider the option of raising the effective lending capacity of the currency bloc's rescue fund as part of efforts to calm jittery markets.
"The auction showed that for the time being Portugal is still able to access financial markets, if at a price. (But), the debate will likely remain focused on debt sustainability issues," said Paolo Pizzoli, economist at ING.
German Bund futures fell to a session low after the auction as relieved investors unwound some safe-haven positions.
The euro was flat at $1.267.
Equity markets were rallying, unfazed by the auction and lifted by earnings prospects.
The FTSEurofirst 300 was up nearly 1% for a 3.25% gain so far this year.
MSCI's all country world index was up more than half a percent with its emerging market counterpart gaining 1.3%.
"(Emerging markets) are benefiting from developments in core Europe ... there's been some stabilisation with the expectation that Japan will support the European bond market," said Elisabeth Gruie, emerging markets strategist at BNP Paribas.
Earlier, Japan's Nikkei ended flat after hitting an eight-month high during the session.