Frankfurt: European shares advanced early on Friday, with gains virtually across the board, after US stocks climbed overnight and Asian markets followed suit, with the focus on US economic data due later in the session.
At 02:15 pm (0845 GMT), the FTSEurofirst 300 index of top European shares was up 1.1% at 869.31 points. It closed 1.2% lower on Thursday, having fallen as much as 2% earlier in the session.
“We trade in a narrow range, up and down, without any clear direction,” said Heinz-Gerd Sonnenschein, equity strategist at Postbank in Bonn, Germany.
The European benchmark index lost 45% in 2008 and fell further early this year, hitting a lifetime low on 9 March. It rose 36% between that day and 7 May, and has remained rangebound between about 823 and 878 points since then.
“We have lost the triggers from the company side ... on the company side it is quiet,” Sonnenschein said, referring to the end of the first-quarter corporate earnings season.
“It’s a mood of wait and see. There are no drivers to push the markets down but there’s also no strong news to push the markets up.”
LandesBank Berlin (LBB) pinpointed 2,500-2,600 points as a key area for the DJ EuroSTOXX 50, which was up 1.0% at 2,478.05 points.
“If it were able to jump over that hurdle, the charts would improve clearly, boding for a new technical upward potential,” LBB said.
Energy stocks drew strength from a rise in the price of crude oil to above $65.5 a barrel, putting the “black gold” on track for its largest monthly percentage gain in more than a decade.
Total rose 1.9%, ENI advanced 0.8% and BP put on 0.6%.
Japanese factory output rose 5.2% in April, the biggest monthly gain since 1953, and sharply higher than the median market forecast for a 3.2% rise.
Manufacturers surveyed by Japan’s Ministry of Economy, Trade and Industry expected their output to jump 8.8% in May and a further 2.7% in June.
The data fuelled a rally in copper prices, which rose to a three-year high. Gold prices hit a three-month high.
Mining shares rallied as a result. BHP Billiton was up 3.4%, Xtrata added 4.5%, Anglo American gained 2.6% and Randgold advanced 5.3%.
Among steelmakers, ArcelorMittal rose 2.7% and Salzgitter traded 3.4% higher.
Banks reversed on Thursday losses, with UBS adding 2.9%, BNP Paribas up 2.4%, Societe Generale rising 2.3% and Barclays 1.7% higher.
Insurers were also in the black on the DJ Stoxx index after a series of sector rating and price target upgrades by Goldman Sachs.
Irish Life and Permanent was up 3.5%, Trygvesta rose 2.1%, Prudential gained 2.4% and AXA added 1.8%.
Shares in pharmaceuticals maker Bayer rose 3.1% after news that US regulators have asked for more information before possible approval for anticoagulant Xarelto.
Morgan Stanley said approval for Xarelto in the United States is expected in the second half of 2009 and that the drug has €2 billion to 3 billion annual revenue potential, which could be worth €7 per share.
US Q1 GDP data is due at 1230 GMT, Chicago PMI at 1345 GMT and the University of Michigan sentiment indicator at 1355 GMT.