Europe marts end higher; euro stable

AFP/London

Isidre Faine, president of CaixaBank, rings a bell at the start of the saving bank’s trading session at the Madrid Stock Exchange, yesterday. Spanish savings bank La Caixa started trade as CaixaBank yesterday by reversing its banking business into its listed industrial holding company, the latest caja to seek private capital under state demands

European stock markets closed higher yesterday, extending gains on the back of better-than-expected US economic data and relief that the Greek debt crisis seems to be under control. Dealers said early trade was tentative as investors consolidated the strong advance made as the Greek parliament approved a make-or-break austerity package to win fresh debt funding from the EU and IMF on Wednesday and Thursday. They said early trade Friday was tentative, however, after subdued manufacturing data in Britain, China and the eurozone but it then picked up after US figures surprised on the upside, sending Wall Street sharply higher. In London, the benchmark FTSE 100 index of top shares closed up 0.74% at 5,989.76 points. In Frankfurt, the Dax rose 0.59% 7,419.44 points and in Paris the CAC 40 added 0.63% to 4,007.35 points. Other European markets posted similar gains. Growth in private sector manufacturing across the eurozone hit a one-and-a-half-year low in June, hit by the impact of budget cuts and weaker exports, according to data from London-based research group Markit. That, combined with weak numbers for Britain and China, reinforced the view that the global economy is slipping as the US struggles to keep activity going in the face of a moribund housing market. “It is notable that the further slowdown in UK manufacturing activity in June was replicated across Europe and also in several other countries,” IHS Global Insight economist Howard Archer said. “This indicates that the global manufacturing rebound from the sharp drop in output suffered during the 2008-2009 recession is now running out of breath. “This may well be influenced by inventory rebuilding having now largely run its course as well as slowing demand.” However, data later yesterday showed the US manufacturing sector picked up in June, with the ISM purchasing managers index rising to a better-than-expected 55.3 in June from from 53.5 in May, when it dropped sharply. In Paris, Renaud Murail at Barclays Bourse said the figures suggested “that fears of a US slowdown might have been exaggerated. In New York, share prices were higher for a fifth straight day as the ISM figures came through although trade was thin ahead of the July 4 holiday weekend. The blue-chip Dow Jones Industrial Average was up 0.97% at around 1615 GMT while the tech-heavy Nasdaq Composite added 1.02%.The euro meanwhile was little changed against the dollar yesterday as the markets digested better-than-expected US manufacturing data and reviewed the apparent progress in resolving the Greece debt crisis. In late London deals, the European single currency was little changed at $1.4498 after $1.4499 in New York Thursday. The dollar rose to 80.84 yen from 80.55 yen. In London late Friday, the euro changed hands at $1.4498 against $1.4499 in New York late Thursday, at ¥117.21 (116.81), £0.9030 (0.9034) and 1.2303 Swiss francs (1.2184). The dollar stood at ¥80.84 (80.55) and 0.8485 Swiss francs (0.8403). The pound was at $1.6056 (1.6047). On the London Bullion Market, gold fell sharply to $1,483 an ounce from $1,505.50 late Thursday.