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European shares near 2 1/2-yr high, led by miners

European shares near 2 1/2-yr high, led by miners
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First Published: Mon, Feb 07 2011. 03 20 PM IST
London: European shares neared a two-and-a-half year high on Monday, extending Friday’s rise on the back of Asian and US gains, with surging mining stocks led higher by a dividend-raising Randgold Resources.
At 2:28pm, the FTSEurofirst 300 was trading up 0.9% at 1,175.33 points, extending Friday’s 0.2% gain.
The heavyweight STOXX Europe 600 Basic Resources index was up 1.5% in early trade, with a broad uptick in both base and precious metals prices supporting stocks across the board.
Randgold Resources earlier posted a 43% rise in full-year profit and announced plans to increase its dividend by 18%, after gold price gains more than offset a fall in production. Elsewhere in the sector, Xstrata gained 2.6% ahead of its results on Tuesday, buoyed by positive broker comment from Citigroup and Nomura, while the restart of a copper smelter in Australia added further support.
Miners such as Xstrata, Rio Tinto and BHP Billiton are expected to post strong results over the next two weeks, boosted by surging iron ore and copper prices, with some expecting more cash to be returned to shareholders.
The early gains in Europe followed a strong end to Asian trading overnight and to U.S. trading last week, fuelled by sector rotation and after a slide in the U.S. jobless figure more than offset a much weaker-than-expected non-farm payrolls number.
“We’re looking at a continuation of the move last week,” said Giles Watts, head of equities at City Index. “The (U.S.) jobless number wasn’t particularly impressive, but the Dow didn’t seem to be too bothered.”
“At the moment, clients are feeling that any dips can be bought into, and the trend is an upwards one, and I can’t see that being thrown off course in the short term,” he added.
Elsewhere among individual stocks, French bank Credit Agricole rose 4% on a report it would not need to raise extra cash to help it meet Basel III capital adequacy rules.
The STOXX Europe 600 Banks index was trading up 1% at 2:44pm, with other stocks in the news including Swiss private bank Julius Baer, up 2.6% on plans to raise its dividend and buy back shares.
In the tech sector, Nokia, the world’s biggest cellphone maker by volume, rose 2.7% after a report over the weekend that it planned a management shake-up and would unveil new financial and strategy targets this week.
On the downside, shares in ENRC extended the previous session’s 1.1% fall and were down an additional 1.1% in early trade, after the news late on Friday that Chief Executive Felix Vulis was resigning for personal reasons.
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First Published: Mon, Feb 07 2011. 03 20 PM IST
More Topics: Markets | Europe | Stocks | Economy | Mining |