Wednesday, October 31 08:36:03
European stocks rose today, helped by bullish earnings from the likes of airline Lufthansa, ahead of the reopening of the U.S. stock market later in the session. The FTSEurofirst 300 was up 4.02 points, or 0.4 percent higher at 1,107.07 points, having gained ground on Tuesday. Trading volume, however, was the second lowest daily volume of the year as many investors stayed on the sidelines while Wall Street remained shut. The index is also stuck in a tight range since central banks stepped in to bolster the global economy in early September.
"QE (quantitative easing) was very important it took away a lot of the systemic risk of the collapse of the financial system and what we have seen in equity markets is an adjustment of the equity-risk premium, which has nothing to with earnings or interest rates," a European-based strategist said. Going forward, he remained just below "neutral" in his positioning in equities, and said all the old problems remain in place -- the stability of Europe, the U.S. fiscal cliff, and slow growth -- which is a much longer story dominating exposure to equities.
Lufthansa rallied 5.9 percent today after the airline managed to increase its operating profit by 5.5 percent in the third quarter, far more than expected, although it increased cost-cutting measures as it battles soaring fuel costs and a gloomy booking environment. ( C) Reuters