Sun, Jan 09, 2011 - Page 10 News List

European markets rally as US jobs, manufacturing rise

Bloomberg

European stocks rallied in the first week of the year after manufacturing data suggested the global economy is recovering, even as government figures in the US showed employment is rising less quickly than expected.

Porsche SE led gains in automakers after a US judge dismissed claims against the company for more than US$2 billion. ARM Holdings PLC surged 8.6 percent. The designer of chips that power Apple Inc’s iPhone said it expects to earn more royalties from Microsoft Corp’s Windows. Belgium’s KBC Groep NV and Greece’s Piraeus Bank SA plunged 2 percent and 18 percent respectively as the EU published proposals to reform bank bailouts.

The STOXX 600 rose 1.9 percent this week, virtually erasing losses from the period between Christmas and New Year. The gauge rallied 8.6 percent last year as companies reported increased profits and the US Federal Reserve unveiled additional bond purchases to support the economy.

“There is plenty of appetite for equities as US data shows the economy in recovery and corporate balance sheets are strong,” said Dale Gibson, head of European equities at Raymond James in London. “But low volumes show an element of inhibition at the start of 2011, as investors begin pricing in future interest rate rises.”

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