AFP/London

European stocks hit 2009 highs yesterday in a burst of economic confidence at the end of a rollercoaster year for equities and as US house prices and consumer confidence data pointed to recovery.

Trading volumes were thin but the main direction was clear on most markets around the world in an end-of-year rally that pushed stocks back up after a chaotic beginning of 2009 when economic gloom sent them plunging.

London’s FTSE 100 index rose 0.65% to hit 5,437.61 points, its highest value since September 8, 2008 before the collapse of US investment bank Lehman Brothers that marked the start of a global financial meltdown.

Paris edged up 0.33% and Frankfurt inched forward by 0.14 %.

Elsewhere in Europe, Zurich rose 0.27% to its highest level since October 2008, Madrid gained 0.10% and Milan rose 0.32%.

“It is merely a continuation of the bullish bias that has taken root among the thin ranks of traders,” said Patrick O’Hare of Briefing.com, noting the meagre trading volumes ahead of the New Year holiday on Friday.

Market action was spurred on by a slight rise in US consumer confidence in December and by a report that showed US house prices dropping at a slower annual rate in October and staying flat compared to September.

The Conference Board said its consumer confidence index rose to 52.9 in December from an upwardly revised 50.6 in November. The reading was a shade below the 53.0 expected by most analysts.

On Wall Street, the Dow Jones Industrial Average edged up 0.10 % but the technology-heavy Nasdaq index dipped 0.13% in afternoon trading.

The euro fell against the dollar in thin trading ahead of the New Year holiday and as fresh data from the US confirmed a recovery is under way in the world’s biggest economy.

The European single currency was changing hands at $1.4346 in London late yesterday, compared with $1.4376 in New York late on Monday.

The euro meanwhile rose against the Japanese unit to ¥131.94 from ¥131.74 previously and the dollar also advanced to ¥91.97 from ¥91.62.

Helping to push the dollar up were new figures showing that the decline in US house prices has slowed and that consumer confidence has improved.

The pound was at $1.5889 from $1.6000 on Monday.

The price of gold gained to $1,106 an ounce from $1,104.50 on Thursday, prior to the London Bullion Market’s holiday closure on Friday and Monday.