European shares jump on German ESM ruling

Stock markets in Europe have climbed to a 14-month high in the wake of a German Constitutional Court ruling paving the way for a new EU rescue fund. The Euro also rallied on the news seen as vital for the eurozone. Germany\'s DAX 30 stock market index gained 0.82 percent to reach 7,370 points in late morning trading on Wednesday, while the Paris CAC 40 climbed 0.72 percent to 3,562 points, helped by an upswing in banking shares. Stock markets in debt-stricken Spain and Italy advanced even stronger, posting gains of 1.2 percent and 1.3 percent respectively. The eurozone blue chip index, Euro STOXX 50, climbed 0.8 percent, adding to an already steep equities\' rally of 25 percent since July. Europe\'s stock markets rallied after the German Constitutional Court rejected a series of legal challenges aimed at preventing the German president from signing the eurozone\'s new rescue fund, ESM, as well as the EU fiscal compact. \"It\'s all good news,\" said Gerard Lane, equity strategist at Shore Capital, adding that fears of a market decline of 20 percent in the case of a German \'no\' were now \"off the table.\" \"The conditionality is quite light, and the big statement is that the ESM is not against the German constitution,\" he told Reuters news agency. On Wednesday, investors primarily bought cyclical sectors in the hope that the ruling would help tackle the eurozone debt crisis and overcome the recession in the crisis-hit southern periphery of the 17-nation currency area. In addition to stock markets, the euro single currency also rallied Wednesday, jumping briefly above an exchange rate of $1.29 for one euro, but later falling back to $1.2889, which was still higher than the rate on Tuesday.