European stocks close higher

Saturday, June 20, 2009

LONDON: European stock markets closed higher on Friday, with sentiment more positive after better-than-expected US data helped ease concerns over the economic outlook, dealers said.

They said US figures on Thursday showing an improvement in the employment picture and a pickup in a key regional industrial reading bolstered investors after a nervous few days worrying the worst of the slump might not be over.

At the same time, they said the markets are now most likely to consolidate the sharp gains made since early March than race ahead, with any bad news inevitably leading to fresh profit-taking.

In London, the FTSE 100 index of leading shares closed up 1.52 percent to 4,345.93 points. In Paris, the CAC 40 index gained 0.85 percent to 3,221.27 points but in Frankfurt, the DAX edged up 0.04 percent to 4,839.46 points. European dealers said that despite the gains, the tone remained somewhat cautious, with investors wanting to see more sustained evidence showing signs of a recovery.

On Wall Street, the Dow Jones Industrial Average was up 0.28 percent at around 1600 GMT, maintaining the upward momentum sparked by Thursday's economic data.

The "upbeat economic data on manufacturing and unemployment claims is carrying over and the markets are poised to finish out the week on a positive note," Charles Schwab & Co analysts wrote.

US trade was technical, however, dominated by position adjustment to account for the multiple expiry of futures and options contracts on the day which often distorts business.

Briefing.com's Patrick O'Hare noted that volumes have been low over the past two weeks and while this was likely reflected the traditional summer lull, "it has more to do with a wait-and-see attitude now that the 'easy money' has been made in the rally off the March low." Any Further gains will need greater volumes, he added.

"Markets are still debating how to interpret the most recent economic indicators," noted Herve Goulletquer of Calyon.

"The two main issues seem to be the precise timing of the expected sustainable recovery and the current value of market prices relative to this expected timetable." Elsewhere in Europe, Amsterdam rose 1.44 percent, Brussels put on 0.85 percent, Madrid jumped 2.10 percent, Milan added 0.59 percent and Swiss stocks gained 0.83 percent.

In Asian trade, Tokyo closed 0.85 percent higher, Hong Kong rose 0.81 percent and Sydney put on 0.19 percent, finishing in positive territory for the first time in several days as investors welcomed Thursday's US data.


(AFP)