UKX FTSE 100 Index

By Victor Reklaitis, MarketWatch

Analyst: 'Economic engine of the eurozone is picking up steam'

European stocks gained ground Tuesday, as analysts said buying was spurred by an encouraging reading on German business sentiment.

The Stoxx Europe 600 was up 0.1% to 344.62 after Germany's Ifo institute said the business mood in Europe's largest economy rose to a 2.5-year high. The pan-European gauge had traded as high as 345.65 earlier Tuesday, according to FactSet data.

The institute's business climate index increased to 110.5 points (http://www.marketwatch.com/story/german-business-mood-hits-25-year-high-in-october-2016-10-25) in October from 109.5 in September, reaching its highest level since April 2014.

"The German Ifo data has provided further evidence that the economic engine of the eurozone is picking up steam," said Naeem Aslam, chief market analyst at ThinkMarkets, in a note.

"Traders are falling more in love with equities. The news has also provided a support for the euro."

On Monday, the Stoxx Europe 600 finished roughly flat (http://www.marketwatch.com/story/european-stocks-advance-with-spanish-shares-energized-by-political-deal-2016-10-24).

Movers: Luxottica Group SpA's stock (LUX.MI) was up 4.4% after the Italian eyewear giant said third-quarter sales grew 3.2% (http://www.marketwatch.com/story/luxottica-quarterly-us-wholesale-sales-decline-2016-10-25).

On the downside, Swiss chip company AMS AG (AMS.EB) plunged 14% in the wake of its third-quarter report (http://ams.com/eng/Press-Center/Press-Releases/Ad-hoc/Monday-24-October-2016). AMS said it sees "muted" growth for its business in the fourth quarter due to "a negative development at a specific customer."

Meanwhile, mining stocks were among the notable advancers, moving up as prices for gold and most other metals rose. Gold futures gained 0.5% to $1,269.50 an ounce.

Anglo American PLC (AAL.LN) tacked on 3.3%, Antofagasta PLC (ANTO.LN) rose 3.1%, Rio Tinto PLC (RIO) (RIO) (RIO) gained 2.6%.

Read:Why mining stocks are due for a 20% drop (http://www.marketwatch.com/story/why-mining-stocks-are-due-for-a-20-drop-2016-10-21)

Indexes: Germany's DAX 30 was up 0.3% to 10,790.64, while the U.K's FTSE 100 (http://www.marketwatch.com/story/ftse-100-gains-as-miners-and-st-jamess-place-jump-2016-10-25) tacked on 0.4% to 7,011.14

France's CAC 40 edged up less than 0.1% to 4,554.38.

The euro was changing hands at $1.0885, up from $1.0875 late Monday in New York.

(END) Dow Jones Newswires

October 25, 2016 06:19 ET (10:19 GMT)

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