Friday, August 09 16:38:52
European stocks climbed today as strong Chinese factory data fuelled a rally in mining shares, while buoyant euro zone banks propelled French and Spanish benchmark indices to year highs.
The FTSEurofirst 300 index of top European shares was up 0.7 percent in late trade at 1,230.67 points, while the euro zone's blue-chip Euro STOXX 50 index gained 0.4 percent, at 2,83.22 points.
Paris's CAC 40 and Madrid's IBEX - which have been outperforming the broader European market since late June, driven higher by rising banking stocks - both hit their highest levels this year on Friday.
The CAC was up 0.5 percent at 4,084.65 points, surpassing a May peak and its highest level since mid-2011, following a surprisingly strong earnings season.
Societe Generale gained 1.9 percent while Michelin added 1.5 percent.
"The structure of the rally is encouraging: you see banks and cyclicals leading the way and beaten-down stocks such as Peugeot recovering, while defensive shares underperform," a Paris-based trader said.
"It's a sign that this rally could go on for a little while, although in the short-term, we're ripe for a pull-back."
The bank-heavy IBEX gained 0.6 percent to 8,724.6 points, after surpassing a January peak and hitting its highest level since early 2012, with BBVA adding 1.8 percent and Banco Santander gaining 0.8 percent.
But heavyweight mining stocks were the top gainers in Europe, after data showed Chinese factory output rose 9.7 percent in July from a year earlier. That was the fastest pace since the start of the year and added to recent data suggesting the world's biggest metals consumer may be stabilising after more than two years of slowing growth.
Lonmin was up 7.9 percent and Antofagasta up 6.5 percent.
The STOXX Europe 600 basic resources sector index has jumped 7.4 percent jump since Wednesday's close but remains 15.5 percent in 2013, by far the worst sector performance this year. The FTSEurofirst 300 is up 8.6 percent year-to-date.
The Euro STOXX 50 has rallied some 13.5 percent since late June. Alpari market strategist Craig Erlam warned the blue-chip index could be range-bound for the rest of the month, however, as the earnings season draws to a close and with no U.S. Federal Reserve policy meeting before September.
"May's highs around 2,850 should continue to cap any upside moves throughout the month, while 2,700 should provide significant support," he said. "I don't expect any break outside of this range unless we get any more significant hints about Fed tapering, or disaster once again strikes in the euro zone, which looks unlikely at this stage especially ahead of the German elections in September." (Reuters)