european markets

European stocks posted modest gains in the opening hour of trading Wednesday as investors speculated on corporate developments and earnings reports amid macroeconomic concerns.

The FTSEurofirst 300 index tracking the region's bluechip stocks advanced around 2.2 points, or 0.2 percent, to be quoted at 1,156.87 while Britian's benchmark FTSE 100  gained 18 points to top the 6,300 mark for the first time in two days.  Elsewhere, Germany's DAX posted a 0.11 percent rise to trade at 7,672.87

Most Asian markets had ended higher earlier, with Japanese markets soaring on currency movement news.

The Nikkei average index climbed 3.77 percent to 11463.75 while South Korea's KOSPI fell 0.10 percent to 1936.19. Australia's S&P/ASX 200 added 0.78 percent to 4921.00.

In China, the Shanghai Composite Index picked up 0.06 percent to 2434.48. Hong Kong's Hang Seng was up 0.68 percent to 23305.03.

Corporate news and earnings reports look set to dominate trading sentiments across the region.

The world's biggest steel maker, ArcelorMittal reported lacklustre quarterly figures as the European debt crisis hurt the metal's demand, but indicated that things could improve in this year. Automobile major Volvo AB has reported a 84 percent drop in fourth-quarter profits.

The Royal Bank of Scotland (RBS) remains in focus in the UK as the full extent of its penalties in its role in the libor rigging issue will be revealed. Fines are expected to be around £400mn and £500mn. Business secretary Vince Cable is also expected to suggest a plan to return RBS to private hands by distributing free shares to the public.

Among other corporate news, the US-based cable operator Liberty Global has confirmed plans to acquire UK's Virgin Media, potentially entering direct competition with Rupert Murdoch's BSkyB.

Economic indicators set for release during the day include German December factory orders which are expected to see a pick up after the November fall and provide further indications on the country's economic health.  

On the political front, French President Francois Hollande is set to meet German Chancellor Angel Merkel during the day ahead of the EU summit starting later this week.

In Asia, the yen's plunge to its lowest level in almost three years against the dollar and euro dominated market sentiments. The recent stimulus optimism, that had pushed the local currency lower by about 15 percent against the dollar in about three months, was further boosted after the Bank of Japan governor Masaaki Shirakawa announced that he will step down from his post earlier than expected.

Shirakawa's resistance to aggressive monetary stimulus measures that could help to boost growth had spiked concerns on Japan's economic outlook. The country's newly elected government supports unlimited aid measures to rev up activities and had demanded that the central bank respond to the economic weakness with action.

Analysts suggest that after Shirakawa, the government may opt for someone who is more accommodative to the government's demands. This has given rise to concerns on the central bank's independence, but has helped to weigh the yen lower and push stock markets higher.

"After the new BOJ leadership announcement scheduled for mid to late February, Shirakawa is expected to be a kind of lame duck and thus, his decision to depart early is not so surprising," said Yujiro Goto, economist at Nomura Research.

"We have expected the new BOJ leader to embark on more aggressive easing and we think the timing of the easing is earlier now, which is marginally positive for USD/JPY".