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European shares rebound sharply; miners soar

European shares rebound sharply; miners soar
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First Published: Wed, May 26 2010. 10 51 PM IST
Updated: Wed, May 26 2010. 10 51 PM IST
London: European shares almost recovered the previous session’s losses on Wednesday in a broad market rebound with miners notching up strong gains.
The pan-European FTSEurofirst 300 index of top shares rose 2.4% to close at 972.17 points, after falling 2.4% in the previous session to its lowest close since September.
The rebound “was to be expected given how far things have fallen,” said Andy Lynch, fund manager at Schroders. “It will remain difficult for markets, as there’s too much debt around.”
The FTSEurofirst 300 is still down more than 12% from a mid-April peak on worries over Europe’s debt crisis.
Mining companies Anglo American, Antofagasta, BHP Billiton, Rio Tinto, Lonmin and Xstrata rose strongly, helped by a report the Australian government will dampen the impact of its proposed super tax on resource companies.
Rio gained 7.3%.
Crude futures also surged, up more than 3% even as data showed US inventories rising, and the euro fell for a third straight session against the dollar, still pressured by fears Europe’s debt crisis could hurt global growth.
Energy companies to gain included Total, BP, BG, Repsol and StatoilHydro, up between 1.4% and 3.4%.
US economic data helped boost confidence. New home sales surged to their highest level in nearly two years in April, while orders for long-lasting manufactured goods rose sharply, pointing to resilience in the economic recovery.
“The data seems to be saying that the world is doing okay at the moment, but so it ought to be with the amount of stimulus that’s being thrown at it,” said Lynch.
Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 ended the day between 1.6% and 2.3% higher.
On Wall Street the Dow Jones, S&P 500 and Nasdaq Composite were up between 0.9% and 1.6% at around the time European bourses were closing.
The STOXX Europe 600 banking index was up 2% after falling 3.7% in the previous session. Bank of Ireland, Allied Irish Banks and Barclays rose between 4.7% and 10.5%.
Lloyds Banking Group and Royal Bank of Scotland were also given a boost from upgrades by Credit Suisse and gained 6.7% and 5.6% respectively. Among individual stocks, Portugal Telecom (PTC.LS) jumped 6% after a Telefonica executive threatened a hostile bid for the Portuguese company.
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First Published: Wed, May 26 2010. 10 51 PM IST
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