European stocks ended higher yesterday, led by banks such as HSBC, as robust US monthly retail sales rekindled hopes of a speedy economic recovery and helped the market resume its two-week rally.
The FTSEurofirst 300 index of top European shares closed 0.1 per cent higher at 992.37 points, gaining ground for the seventh time in eight sessions.
Banking stocks paced the gains, with HSBC up 1.4 per cent, Société Générale up 1.1 per cent and Banco Santander up 1.2 per cent.
"Good macro figures are piling up," said Jacques Henry, analyst at Louis Capital Markets, in Paris.
"There has been no negative signal on the macro front in a while, and the economic recovery is happening quickly. Long-only investors are coming back en masse," Mr Henry said.
US retail sales rose at the fastest pace in three and a half years last month, and a gauge of New York State manufacturing hit a near two-year high, data showed.
Resource-related stocks also gained ground, climbing along with metal and crude oil prices. ArcelorMittal gained 2.6 per cent, Rio Tinto rose 1.7 per cent and Repsol added 1.3 per cent.
Around Europe, UK's FTSE 100 index rose 0.5 per cent, Germany's DAX index added 0.2 per cent, and France's CAC 40 gained 0.6 per cent.
"I'm confident for the remaining part of the year, because near-zero interest rates have prompted investors to come back to risky assets," said Romain Boscher, head of multi-asset management at Groupama Asset Management, in Paris.
French utility EDF surged 6.7 per cent after daily Les Echos reported the French government could end regulated electricity prices for companies by 2015, in a deal with the European Commission to be announced this week.
"Ultimately, having part of the customers still regulated - residential mainly and small industrials - but at a higher price level than now, and the industrials not regulated anymore is a huge positive for EDF," Bank of America-Merrill Lynch analysts wrote in a note. Stocks also got a boost from the US Federal Reserve chairman Ben Bernanke, who said the US economic recession was probably over but the recovery would be slow and take time to create new jobs.
"From a technical perspective, the recession is very likely over," Mr Bernanke said at a Brookings Institution conference, but he cautioned it may not feel like it's over.
On the downside, pharma stocks fell, with GlaxoSmithKline down 1.2 per cent, Sanofi-Aventis down 0.4 per cent and AstraZeneca down 0.2 per cent.
Shares of food producers and retailers also lost ground, with Nestlé losing 0.6 per cent, Ahold falling two per cent and Carrefour dropping 2.4 per cent.
The FTSEurofirst 300, which has gained 54 per cent since reaching a floor in early March, is up 19 per cent so far in this year, but is still down 15 per cent from its level in mid-September 2008 before the collapse of Lehman Brothers, once the fourth-largest US investment bank.