Sun, Jul 03, 2005 - Page 10 News List

European markets rally as US whets investors' appetite


Leading European stock markets rallied on Friday as better than expected US economic data in the wake of the Federal Reserve interest rate hike whetted investors' appetites on both sides of the Atlantic.

The London FTSE 100 index gained 0.93 percent at 5,161.0 points, the Frankfurt DAX 30 added 0.67 percent to 4,617.07 points and the Paris CAC 40 advanced 0.95 percent to 4,269.62.

The DJ Euro STOXX 50 index of leading eurozone shares climbed 0.85 percent to 3,208.61 points.

On Wall Street, by London's close, the Dow Jones Industrial Average was up 36.00 points at 10,311.00, while the NASDAQ composite index was 1.76 points firmer at 2,058.72, both off earlier highs as the rally started to lose momentum.

After the as-expected quarter-point US interest rate hike Thursday and hints from the Federal Reserve of further monetary policy increases to come, Friday's US data seemed to back up the Fed decision.

The US June ISM manufacturing index reading exceeded expectations at 53.8 percent, against a forecast of 51.5 percent.

There was also a bullish final reading of the University of Michigan's consumer sentiment index for last month, which rose to 96.0 from 94.8 early last month and 86.9 in May. Economists were expecting the index to slip to 94.5.

In London, shares in Rolls-Royce topped the FTSE 100 leaders board, ahead 3.05 percent at ?2.96 after the engineer said in an update that it expected the civil engine fleet to rise by 40 percent over the next five years.

Dealers in Frankfurt said sentiment was underpinned by German Chancellor Gerhard Schroeder's successful move to lose a parliamentary confidence vote he had engineered in order to pave the way for early elections in September.

Schroeder had called on his Social Democrats and their coalition partner, the Greens, to abstain in a bid to have President Horst Koehler dissolve the parliament and call a general election.

Opinion polls show the conservative opposition CDU/CSU bloc would win the vote, a prospect which analysts have said would usher in reforms that would benefit the economy.

Elsewhere in Europe, the Swiss Market Index rose 0.43 percent to 6,279.78 points.

The Amsterdam AEX added 1.15 percent at 388.26 points, the Brussels BEL-20 climbed 0.40 percent to 3,125.38, the Madrid IBEX-35 was up 0.47 percent at 9,829.1 and the Milan SP/MIB advanced 0.58 percent to 32,532.0.

This story has been viewed 2372 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top