Eurostoxx 50: 2,779.94 (+45.99) Frankfurt DAX: 7,204.79 (+119.65) Paris CAC: 3,867.10 (+59.50)EUROPEAN SHARES rose sharply yesterday as data suggesting the Chinese economy may avoid a hard landing helped to ease global growth concerns.
The pan-European FTSEurofirst 300 index of top shares rose 0.8 per cent to close at 1,100.86 points, although it is down 3.6 per cent in June, hit by worries about the euro zone debt crisis and the pace of global economic growth.
“The market got a bit oversold with a number of stocks trading below 200-day averages, and we had reasonable data out of China which broke the trend ,” said London-based James Buckley, a fund manager at Baring Asset Management, which manages £30 billion. “At a time when there’s no real corporate news flow, that combination has been enough to push the market higher.”
In an across-the-board rally, heavyweight banks were among the gainers. BNP Paribas, Banco Santander and UniCredit rose between 2.3 and 2.5 per cent.
Investors were encouraged by a flurry of Chinese data that suggested the country’s economic growth was not slowing too quickly, and as China’s central bank raised bank reserve ratios to try and curb inflation.
US retail sales fell in May for the first time in 11 months as receipts at auto dealerships dropped sharply, but the decline was less than expected, offering hope of a pick-up in economic activity.
The euro zone blue-chip index rose 1.7 per cent to 2,779.94 points. The index’s price-earnings ratio is “near the lower edge of the range of the last 18 months”, said UniCredit in a note.
“In the event of a pullback in stock prices, the support becomes steadily stronger in the 2,700/2,650 area. If, however, the EMU crisis were to escalate...the support would become less sustainable.”
“More money for Greece” would mean short-term relief, but is no solution to the crisis as such, said UniCredit.
Its year-end target for the index is 2,900, but added: “During the summer months we expect, in contrast, clearly lower index levels.”
Paris-based analysis firm Day By Day said it sees support at 2,720 points, 2,688 and 2,640, and resistance at 2,790 points, 2,840 and 2,909. – (Reuters)
