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European stocks close mostly firmer

European stocks close mostly firmer
AFP
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First Published: Fri, Dec 10 2010. 12 06 AM IST
Updated: Fri, Dec 10 2010. 12 06 AM IST
London: European stock markets closed firmer Thursday, with investors building positions cautiously as some of the worst fears over the eurozone debt crisis eased, dealers said.
They said the tone was positive overall, noting that US data continued to be largely positive -- US weekly new jobless claims fell more-than-expected, providing more support for those who now favour equities over bonds.
Bonds have enjoyed sustained gains over the past two years as investors have poured money into the market on the view that a safe, fixed return was preferable as the global financial crisis took its toll on the economy.
There is a growing view, however, that if the US economic recovery can be kept on track, then stocks will offer better returns next year, with bonds having gone as far as they can unless there is a fresh disaster.
Stock markets in recent months have chalked up steady gains to take them back to levels last seen two years ago just before the financial crisis took hold.
In London, the FTSE 100 index of leading shares closed up 0.23% at 5,807.96 points. In Paris, the CAC 40 gained 0.68% to 3,858.05 points but in Frankfurt the DAX slipped 0.17% at 6,964.16 points.
“Markets are just tracking higher slowly but surely as finally investors are no longer focusing on the doom and gloom scenario within the eurozone but instead the year-end and the possibility that the FTSE could reach the 6,000 (points) level,” said Simon Denham, head of trading group Capital Spread.
“All the indices seem to be heading higher with Asian stocks putting in modest gains and on Wednesday US markets closed at their second highest level of the year.”
Xavier de Villepion of Global Equities in Paris said investors were looking to stocks now as they are believed to offer greater potential at this stage.
Dealers said a decision by the Bank of England to keep interest rates at a record low 0.50% was as expected while a sharp Fitch ratings downgrade for Ireland attracted unusually little comment given the country’s travails.
In New York, shares were little changed, consolidating after the jobless claims data pointed to a modest recovery in the employment market.
The blue-chip Dow Jones Industrial Average was off 0.22% while the tech-rich Nasdaq Composite gained 0.09% at around 1700 GMT.
Initial claims for US unemployment benefits dropped 17,000 last week to 421,000 while the four-week moving average, which helps to smooth out volatility, was 427,500, down 4,000.
“The four-week initial claims average is the lowest since August 2008 and is a hopeful sign that employers are less pessimistic about the demand outlook as they slow the pace of their layoffs,” said Patrick O’Hare of Briefing.com.
Elsewhere in Europe, Amsterdam jumped 2.66%, Brussels put on 0.27%, Madrid added 1.06%, Milan rose 0.69% and Swiss stocks gained 0.45%.
In Asian trade earlier Thursday, Tokyo added 0.52% to a seven-month high after an upward revision to Japanese third quarter growth.
Hong Kong added 0.34% but the Shanghai Composite Index fell 1.32% while Sydney gained 0.88%.
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First Published: Fri, Dec 10 2010. 12 06 AM IST
More Topics: Stocks | Europe | Shares | Euro | US |