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Euro shares rally resumes ahead of data

Friday, August 03 11:46:12

European stocks rose this morning, erasing most of the previous day's pull-back and resuming a week-long rally as investors judged the European Central Bank remains committed to bold action to fight the debt crisis.

Markets were also awaiting U.S. jobs data that could fuel expectations of further stimulus from the Federal Reserve.

The FTSEurofirst 300 index of top European shares was up 1 percent at 1,065.50 points, on track for its ninth weekly gain in a row, extending its longest run of weekly rises since mid-2005.

The benchmark index dropped 1.2 percent on Thursday after European Central Bank President Mario Draghi disappointed a some investors by announcing no immediate action to help lower the borrowing costs of Spain and Italy.

"There was no 'bazooka' from the ECB as some had expected, but sometimes the threat of action alone is very efficient. The risk is on the upside now, no one want to short this market," a Paris-based trader said. The euro zone's blue chip Euro STOXX 50 index was up 1.5 percent at 2,295.67 points. It lost 3 percent on Thursday following Draghi's press conference, but with Friday's recovery, it has risen 7 percent since Draghi said last week the central bank was ready to do whatever it took to save the euro.

The index dipped in early trade on Friday, before bouncing off the 50 percent Fibonacci retracement of its week-long rally. (C ) Reuters