Banks lead European markets to 5-week closing high

Better-than-expected earnings report from Deutsche Bank and UBS steered European indices to a five-week closing high on Tuesday, but more than half the market's early advance was wiped out after figures showed a decline in the US consumer confidence.

The FTSE 300 climbed for a sixth consecutive session to finish 0.5% higher at 1,054 points. Banks lead the market, with the STOXX Europe 600 banking index rising 4.7%. The FTSE 100 index was up 0.3%.

UBS surged 11%, while Société Générale, Barclays and Crédit Agricole climbed between 7.7 and 10.6%.

In the US, most stocks fell as retailers slipped after consumer confidence retreated to a five-month low erasing early gains made after positive earnings reports from DuPont, Fluor Corp and Cummins. The Conference Board’s consumer confidence index fell to 50.4 from a revised 54.3 in June.

The S&P 500 slipped 0.1% to close at 1,114. The Dow Jones Industrial Average rose 12 points, or 0.1%, to 10,537 and the Nasdaq was down 0.3% to 2,288.

DuPont shares gained 3.6% to $40.38, while Cummins rose 2% to $79.43. Fluor Corp climbed 2.6% to $49.10.

In China, the Shanghai Composite index fell 0.5% to 2,575 as banks ran into profit-taking amid fresh talk of problem loans and worries about further fundraising in the sector.

The Nikkei 225 index was down by 0.1% to 9,497 after another day of rises for the yen hit exporters.

However, the Hang Seng index in Hong Kong rose 0.6% to 20,973 ahead of the expiry of front-month futures contracts. The broader FTSE Asia-Pacific index gained 0.4%.

Mumbai’s Sensex index reversed its recent laggard trend to rise 0.3% to 18,077, in spite of a slightly more aggressive rise in interest rates than investors had expected.