European stock markets edge higher, EasyJet shares take off

London - Europe's main stock markets rose slightly on Tuesday but EasyJet's share price was propelled higher on a positive outlook.

Asian stock markets had earlier mostly risen as traders took heart from a healthy run on Wall Street, though German political uncertainty kept pressure on the euro.

EasyJet's annual net profit slumped by almost one third on strong competition and a Brexit-fuelled slump in the pound, the British no-frills airline revealed on Tuesday.

But its share price was up 5.6% at 1 349 pence in mid-morning deals on "signs of a break in the clouds ahead", noted George Salmon, equity analyst at stockbroker Hargreaves Lansdown.

"Forward reservations are up on last year, and the trend for rising costs and lower prices is set to reverse in the coming months."

Across the Atlantic, while concerns about the prospects for US tax reform continue to nag, optimism about the global economy provided some buoyancy to Wall Street, with all three main New York indices closing higher on Monday.

However, with the Thanksgiving holiday shortening the US trading week analysts do not expect much more guidance from New York in the next few days.

Still, Tokyo's main stocks index jumped 0.7% on Tuesday, led by exporters.

Among other markets, Hong Kong pushed to a 10-year high, with Tencent up 2.4%, extending Monday's surge that makes it the first Asian member of the exclusive club of global firms with a market capitalisation above $500bn.

The Chinese internet giant was about $520bn, around the same as Facebook.

There was meanwhile little negative reaction to news that US President Donald Trump had redesignated North Korea as a state sponsor of terror, promising on Monday to increase sanctions on it.

On currency markets the euro remained under pressure after German Chancellor Angela Merkel struggled to form a government following months of horse-trading with other parties failed.

The leader of 12 years indicated Monday she was ready to hold snap elections after the collapse of coalition talks at the weekend plunged Europe's biggest economy into turmoil.

"Merkel said she did not favour a minority government because it wouldn't bring the stability necessary to govern effectively," said Greg McKenna, chief market strategist at AxiTrader.

"That suggests more talks but an increased chance of fresh elections in early 2018. How that plays out is going to be interesting for the euro and certainly the Brexit process as well."

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