Sun, Nov 20, 2005 - Page 10 News List

Carmakers, mergers push European markets higher


With oil prices touching five-month lows, the auto sector combined with M&A to power European markets to a higher finish on Friday.

The German DAX 30 ended up 0.5 percent at 5,123, the French CAC 40 gained 0.7 percent at 4,556 and the UK's FTSE 100 index added 0.7 percent at 5,498. Shares in London touched a four-year high on gains in the mining sector.

Europe's gains came after the NASDAQ on Thursday reached its best level since June 2001, while Japan's NIKKEI 225 touched a five-year high. US stocks traded higher on Friday, but off their best levels.

Heino Ruland, a strategist for German brokerage Steubing, said in addition to factors such as falling crude and a rising euro, he's starting to see evidence that local investors are returning to the Frankfurt market, which has been dominated by flows from foreign investors for much of the year.

Local investors are discovering the confusion over Germany's recent federal elections has little bearing on corporate restructuring programs playing out in the largest European economy, Ruland said.

"I'm still quite optimistic that we are in the middle of a year-end rally," he added.

Swiss Re shares closed up 1.2 percent after an earlier trading suspension. The reinsurer is spending US$6.8 billion to take on most of General Electric Co's reinsurance business. Peer Munich Re added 1.5 percent.

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