European stock markets rise; Germany at new record high

AFP

London

European stock markets advanced in light trading yesterday ahead of the holiday season, as Germany hit a new record peak.

London’s benchmark FTSE 100 index climbed 0.75% to stand at 6,656.09 in afternoon deals, while in Paris the CAC 40 in Paris edged up 0.13% to 4,199.05 points.  

Frankfurt’s DAX 30 pushed into record territory, rising as far as to 9,471.73 points. It later stood up 0.69% at 9,465.31 points.

Madrid’s IBEX 35 rose 0.39%  and Milan’s FTSE MIB climbed 0.43%.

“At the beginning of the festive week... the DAX is taking out yet another high, still benefiting from last week’s Fed’s revelations to trim its monthly bonds purchases,” said Varengold Bank analyst Anita Paluch.

European indices won strong support last week after the US Federal Reserve boosted confidence in the economic recovery by announcing plans to scale back its vast stimulus programme.

Global investors have broadly welcomed the Fed’s decision to reduce its bond-buying by a modest $10bn a month to $75bn while pledging to keep interest rates at record lows for the foreseeable future.

The move indicated the central bank is confident the world’s number one economy is becoming strong enough to stand on its own feet as it recovers from the financial crisis.

US stocks opened higher yesterday, riding a wave of forward momentum after last week’s records, a positive outlook from the International Monetary Fund and a major Apple deal in China.  

Five minutes into trade, the Dow Jones Industrial Average rose 0.44% to 16,292.27 points.

The broad-based S&P 500 jumped 0.52% to 1,827.78, while the tech-rich Nasdaq Composite Index increased 0.68% to 4,132.80.

The Dow and S&P 500 closed at record peaks last week after the US Federal Reserve’s announcement.

Over the weekend, International Monetary Fund Managing Director Christine Lagarde praised the Fed’s move and said the international organisation sees a “much stronger outlook for 2014” in the US economy.

Apple shares bolted 2.7% higher after announcing a long-anticipated deal with China Mobile that will give the US company a much bigger entry into the huge Chinese market.  

In foreign exchange trading, the European single currency rose to $1.3701 from $1.3671 late in New York on Friday.

The euro climbed to 83.82 pence from 83.68 pence. The British pound gained to $1.6346 from $1.6332.

Gold dipped to $1,192.75 an ounce from $1,195.25 Friday on the London Bullion Market.

In London, Royal Mail shares traded on the FTSE 100 index for the first time since part-privatisation of the British postal operator.  

Its stock was down 1.9% to 580.00 pence – valuing the company at about double the amount at the time of its flotation in October.

Shares in Rolls-Royce drifted up 0.3% to 1,247 pence despite the engine maker saying that Britain’s Serious Fraud Office had launched a formal investigation into alleged bribery linked to the group’s overseas operations.

It comes one year after the British company warned that it might be prosecuted over alleged “malpractice” in Indonesia and China after passing on information related to bribery concerns to the office.