Eurostoxx 50: 2,962.92 (+52.01) Frankfurt DAX: 7,179.81 (+138.50) Paris CAC: 4,054.76 (+65.58)EUROPEAN SHARES hit their highest close in just over three weeks yesterday after strong US jobs data supported the view the global recovery was on track, while technicals also pointed to a more bullish trend.
The pan-European FTSEurofirst 300 index of top shares closed up 1.5 per cent at 1,141.40 points. Prospects for technicals brightened after the euro zone’s blue-chip Euro STOXX 50 index moved above its 50-day moving average, but fund managers were still said to be stock selective.
“US non-farm payroll data seems to be continuing in the right direction and the unemployment rate is coming down,” Veronika Pechlaner, an investment manager with the €100 million Ashburton European equity fund. “But, we are still selective on consumer stocks as wage inflation is still not coming through.”
Financial stocks featured among the top performers after fund managers said the announcement by Ireland’s Minister for Finance that it would be unwise to impose losses on senior bondholders at banks was being taken by the market as positive.
Buyers came for Bank of Ireland and Allied Irish while UK banks and insurers performed well on the back of the Irish Central Bank’s stress test indications.
Insurer Swiss Re gained 3.6 per cent on talk of a stake increase by US investor Berkshire Hathaway, while stock exchanges themselves were also in the spotlight.
Deutsche Boerse fell 1.4 per cent after Nasdaq OMX and IntercontinentalExchange unveiled a rival bid for NYSE Euronext which was 27 per cent above the companys valuation before the Frankfurt stock market operator made its agreed bid in February.
Looking at the overall market, analysts said valuations were low and the corporate picture was improving and they remained bullish for the medium term.
“We are positive on the outlook for equities. We see that corporate earnings are well underpinned overall and that should be supportive, said Anko Beldsnijder,managing director of MainFirst Asset Management, which manages €1 billion.
“We have added the metals and mining sector again to overweight because of attractive valuations.” – (Reuters)
