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Sun, Jan 03, 2010 - Page 10 News List

European stocks advance for best year in a decade

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European stocks posted their third straight weekly advance, with the Dow Jones STOXX 600 Index completing its biggest annual increase in a decade as the global economy recovered from its worst recession since World War II.

Basic-resources companies and banks, the worst-­performing industry groups in 2008, led gains in the measure, surging 100 percent and 46 percent last year, respectively. Kazakhmys PLC, Kazakhstan’s biggest copper producer, soared 475 percent, as the price of the metal more than doubled. Natixis SA, the investment-banking unit of France’s second-largest lender by branches, climbed 184 percent.

The STOXX 600 rose 28 percent to close the year at 253.16, having posted a 0.5 percent gain in the holiday-shortened week as China raised its economic growth forecast. The measure rebounded 60 percent from the 2009 low in March amid record-low interest rates in the US and Europe and as governments committed about US$12 trillion worldwide to revive credit markets and stimulate growth. The S&P 500 gained 23 percent last year.

National benchmark indexes rose in all of the 18 western European markets except Iceland last year. The north Atlantic island is the Western nation hardest hit by the global credit crisis, and needed to turn to the IMF for a US$2.1 billion loan to avert a default.

Norway’s OBX was the best performer, gaining 70 percent as higher oil prices lifted oilfield-services companies including Seadrill Ltd and Petroleum Geo-Services ASA, which both more than doubled.

The UK’s FTSE 100 climbed 22 percent, and on Tuesday became the first equity market among the biggest developed economies to recover its loss following Lehman Brothers Holdings Inc’s bankruptcy in September 2008. The UK joined Hong Kong, Norway, Portugal, Singapore, Spain and Sweden as the only nations among 23 developed markets that have recouped all of their post-Lehman losses.

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