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European markets surge as oil, mining stocks rise

European stocks surged on Friday for a second consecutive day as higher crude and gold prices helped the oil and mining sectors.

The UK's FTSE 100 Index rose 1.3 percent to 6,661.30, while France's CAC-40 Index climbed 0.6 percent to 5,794.87. Germany's DAX Index finished 0.2 percent higher at 7,949.17.

"Fundamentals aren't great, but they're not really all that bad," said Mike Lenhoff, chief strategist at Brewin Dolphin. "With the Fed cutting rates and valuations still satisfactory, even allowing for earnings downgrades, I think the bull market still has legs."

Oil prices surged to more than US$92 a barrel as tensions in the Middle East escalated.

Royal Dutch Shell gained 3 percent, continuing its ascent from Thursday when the company reported strong third-quarter results, showing high oil prices helped offset loss of production.

UK oil companies BP and BG also rose -- BP closed up 2.7 percent and BG Group closed 2.6 percent higher.

Basic resources stocks rose as precious metals hit record highs as the US dollar continues to weaken on expectations of another US interest rate cut. Rio Tinto rose 4.3 percent to 4,417 pence. Antofagasta was up 3.9 percent to 849.5 pence.

Telecommunications company TeliaSonera's strong third-quarter results led telecom stocks, which continued their climb from Thursday.

TeliaSonera rose 5.6 percent after the company reported a 6.8 percent increase in third-quarter net profit on higher sales and contributions from Eurasia, and said an extraordinary dividend would be given this year.

Deutsche Telekom climbed 2.5 percent, while Vodafone closed 2.1 percent higher and BT was up 2.3 percent.

France Telecom shares fell 0.5 percent as investors took profits from Thursday's gains.
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