European stock markets surge
From correspondents in London | July 02, 2009
EUROPEAN stock exchanges surged ahead overnight in line with a robust opening on Wall Street and in response to some positive US economic data despite worse-than-expected unemployment figures.
The London FTSE 100 index added 2.15 per cent to close at 4340.71 points while in Paris the CAC 40 rose 2.43 per cent to reach 3217. The Frankfurt Dax gained 2.0 per cent to end the session at 4905.44.
There were gains of 1.18 per cent in Madrid, 2.12 per cent in Brussels, 1.99 per cent in Milan and 2.19 per cent in Amsterdam.
Wall Street shares earlier opened a new month and quarter on an upbeat note, with the Dow Jones Industrial Average up 1.36 per cent at 8561.57 at midday local time. The tech-heavy Nasdaq had risen 1.24 per cent to 1857.77.
Wall Street looked to overseas markets for early cues, shrugging off an early report showing a eaker-than-expected US labour market.
"Some upbeat manufacturing data from China and Europe are helping soothe concerns that the economic reality has fallen behind the recent rally in the equity markets since mid-March," said analysts at Charles Schwab & Co.
That helped offset a survey from payrolls firm showing the US private sector shed 473,000 jobs in June.
"The ADP report for June wasn't as dire as the initial headlines indicated," said Patrick O'Hare at Briefing.com
"Nonetheless, it isn't good news. It is a sobering reminder that the labour market is weak and that there is a heightened risk of disappointment in the (official) nonfarm payrolls number that will be reported Thursday (local time)."
But gains accelerated on a report showing the US manufacturing sector showed signs of emerging from its slump in June, after similar reports from Europe and China.
The US Institute of Supply Management said its index of the sector also known as the purchasing managers (PMI) index, increased to 44.8 per cent from 42.8 per cent in May.
It was below the 50 per cent level that separates expansion and contraction, and just under the 45 per cent expected by private economists.
But Ryan Sweet at Moody's Economy.com said the ISM report "suggests that the worst of the manufacturing contraction is behind us. The details of the report were much more upbeat than the headline number would suggest".
In Asia today, Japanese share prices ended slightly lower as investors took profits after a key index of business confidence rose by less than expected, dealers said.
Tokyo's benchmark Nikkei-225 index lost 18.51 points, or 0.19 per cent, to end at 9939.93, a day after ending at a two-week high.
The Nikkei topped 10,000 points at one point during the day but failed to hold above the key level.
"As the index topped 10,000, it was a good time to sell," said Hideaki Higashi, a strategist at SMBC Friend Securities.
The Bank of Japan said in its quarterly Tankan survey that business confidence among major Japanese manufacturers had improved for the first time in two-and-a-half years.
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