London: European shares extended a rally into a fourth session on Friday, after Wall Street was boosted by falling jobless claims and solid sales from a handful of large retailers.
At 2:15pm, the FTSEurofirst 300 index of top European shares was up 0.3% at 1,018.40 points, after rising 5.1% in the previous three sessions, and on track for its biggest weekly gain in nearly a year.
But the index is still down more than 8% from a mid-April peak, on worries about debt levels in Europe and slowing economic growth.
“We’ve had better information this week, such as German exports, offsetting some of the worries about China slowing down. China will slow down, but it’s not going to stop,” said Justin Urquhart Stewart, director at Seven Investment Management.
“But the markets can’t find any real direction, as the momentum may roll over, and we’re not sure about growth next year. But the market is also saying that we’re not looking at disasters either.” In a broad rally, the heavyweight banking sector was among the gainers, with the STOXX Europe 600 banking index up 0.8%. The index is up nearly 10% this week, on optimism that European banks will pass stress tests, and after US bank State Street said its earnings would beat forecasts.
Gainers included BNP Paribas, BBVA, Credit Agricole and Deutsche Bank, up between 1 and 1.3%.
Norway’s biggest bank, DnB NOR, rose 1.7% after saying it was cutting its loan loss expectations for 2010 after its domestic market improved in the second quarter and pretax earnings beat analysts’ expectations.
Miners rose, with the price of copper and other metals gaining, as the euro held near a two-month high against the dollar.
Eurasian Natural Resources Corp., Lonmin and Xstrata rose between 2.1 and 2.2%. Rio Tinto rose 2.5% after Chief Executive Tom Albanese said 2010 was shaping up well.
Antofagasta rose 2.7% after Citigroup upped its rating for the Chilean copper miner to “buy” from “hold” on valuation grounds based on its cash generation capabilities.
Across Europe, Britain’s FTSE 100 rose 0.1%; Germany’s DAX and France’s CAC40 were up 0.5 and 0.4% respectively.
The Thomson Reuters Peripheral Eurozone Countries Index rose 0.9%.
Transocean, the world’s largest offshore drilling contractor, gained 4.3% after a US federal court refused to reinstate a ban on deepwater oil drilling imposed after BP’s massive oil spill in the Gulf of Mexico.
The Dow Jones industrial average rose 1.2% on Thursday, on upbeat economic data, including lower weekly jobless claims.
Japan’s Nikkei average booked its best weekly rise in seven months on Friday and market players said more gains may be in store after it moved further away from a seven-month low and held above a key retracement support.