Europe shares extend early gains, led by cyclicals

Europe shares extend early gains, led by cyclicals

At 12:53pm, the FTSEurofirst 300 index of top European shares was up 1.2% at 987.44 points. The benchmark index has surged 16% since hitting a floor on 23 September.

“This is a correction of the excessive retreat seen during the summer. The worst-case scenario of debt defaults from many euro zone countries or even of a break-up of the bloc that had been priced in has been avoided," said Marc Touati, head of economic research at Assya Global Equities.

“And this relief rally is not over, when you look at the major gap between market capitalisations and shareholders’ equity."

Cyclical mining shares led the gains, with Rio Tinto up 2.4%, while BP gained 4.2% after agreeing on cleanup costs with Anadarko , its partner in the well which caused the Gulf of Mexico oil spill.