European stocks rose early today, reversing the previous day's losses as banks rallied after Societe Generale posted reassuring results, but gains were limited as investors braced for Spain's first bond auction since its most recent downgrade.
Investors also awaited the European Central Bank policy meeting, expected to keep interest rates on hold at 1 percent and resist calls to restart its bond-buying programme to ease pressure on Spanish debt.
At 0708 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,049.52 points, with Societe Generale rising 3.8 percent.
"The Spanish and French debt auctions will be closely watched today," said Guillaume Dumans, derivatives trader and co-head of 2Bremans, a Paris-based research firm using behavioural finance to monitor investor sentiment.
"One thing to keep in mind is that U.S. stock indexes have very limited room on the upside, while our morning sentiment indicator has moved into the contrarian zone, signalling a lower close today in Europe." ( C) Reuters