VW deal gives spur to European market An announcement that plans to integrate Volkswagen and Porsche were set in motion provided movement in otherwise quiet trading across European markets. VW said it will buy the half of Porsche that it does not own for €4.46bn, after the boards of both car groups approved a plan that will take effect in August. IN Equities Preference shares in VW rallied 6.3 per cent to €136.05, while Porsche's preferred shares gained 0.4 per cent to €42.10. VW was the best performing stock on the FTSE Eurofirst 300, which rose by a more sombre 0.2 per cent to 1,047.79. Indices across Europe made small gains, with the exception of Spain and France, as traders wait for an anticipated interest rate cut from the European Central Bank. The ECB is expected to announce a cut to its benchmark interest rate by 25 basis points. This would be a record low for the central bank. Market watchers say the rate cut has already been priced into European markets, which have mostly rallied over the previous four sessions. "With the doom and gloom of May and June, the market is quite polarised and only needs things to be less negative for us to see a sharp rally," Neil Wilkinson, fund manager at Royal London Asset Management said. "In order for it to be sustained we need further support from the ECB and political momentum to follow up on what was announced over the weekend," he added, referring to the EU deal to help recapitalise Europe's struggling banks. Shares in truck maker Man, one of VW's stable of brands, made more muted gains, rising 2.7 per cent to €84.86. Germany's wider Xetra Dax index rose 0.6 per cent to 6,603.99. Elsewhere, Spanish insurer Mapfre rallied 2 per cent to €1.66, against more general selling across the Ibex 35. Spain's benchmark index fell 0.9 per cent to 7,106.5, after a government bond auction revealed the country's 10-year borrowing costs increased. Yields climbed to 6.43 per cent from 6.04 per cent at the previous auction. In France, the CAC 40 fell 0.1 per cent to 3,266.68. Veolia Environment was among the worst performing stocks across Europe after UBS cut its rating to "sell" from "neutral," changing its target price to €9 from a previous €10. Shares in the French utility fell 3.6 per cent to €9.65. In Italy, the FTSE MIB index rose 0.1 per cent to 14,388.86.