European markets brushed aside marked weakness for bonds and another run on the euro to edge into new high ground on a number of fronts, notably in Frankfurt and Paris. The FTSE Eurobloc index rose 1.9 per cent to 1,112.63. The FTSE Eurotop 100 index gained 2.7 per cent to 3,094.79 and the broader FTSE 300 index 2.6 per cent at 1,343.26.
Frankfurt broke through to a 1999 high with the Xetra Dax index advancing 101.70 at 5,480.22 to extend the gains over the past four days to 3.3 per cent.
Financials swung higher with brokers describing the gains as a "relief surge" in the wake of the Federal Reserve's modest quarter-point rise and move from a tightening to a neutral bias on rates.
Deutsche Bank rose 1.95 to 60.97 and Dresdner 65 cents to 38.60. Insurers pushed even faster, Allianz adding 15.10 or 5.5 per cent at 285.40 and Munich Re 5.40 at 185.
Paris has kicked off the third quarter on a bullish note, after recording a strong performance in the first half. The CAC 40 index of French blue chips rose 15.06 per cent in the first six months this year. Yesterday it rose by 1.6 per cent to a record of 4,609 and continues to show signs of strength, according to analysts.
Zurich extended early gains as activity picked up. Financials were boosted by the improved interest rate outlook. CS Group put on SFr12.50 to SFr281.50 while UBS was SFr12 ahead at SFr476.
Amsterdam ended just short of its high for the session with the in spite of broad weakness for the local bond market.
Aegon, hit lately by talk that the financial giant was set to renegotiate the terms of the takeover of Transamerica of the US, stood out within a subdued financial sector, climbing 3.90 or 5.5 per cent to 74.25.
Milan pushed higher, in line with neighbouring markets, and with attention again focussed on Intesa and BCI as details of their long-awaited merger were digested by investors. The Mibtel index finished 224 higher at 24,832.
