European shares rose for the fourth straight day yesterday, boosted by upbeat US economic data, optimism on Greece's deficit, and with Standard Chartered rising after results.
The pan-European FTSEurofirst 300 index of top shares rose 0.8 per cent to 1,035.56 points, its highest close since January 21.
The benchmark index is up more than 60 per cent from a record low it hit on March 9, 2009. Banks added most points to the index. StanChart rose 5.3 per cent after meeting expectations with a 13 per cent jump in 2009 profit, as strong investment banking growth in its core Asian markets offset a jump in bad debts in the Middle East.
UniCredit rose 4.2 per cent after results at Pekao, in which it has a majority stake, beat forecasts. Other banks to rise included Banco Santander, Barclays, Lloyds and UBS up between two per cent and 2.7 per cent.
The US services sector grew in February at its fastest pace in more than two years, and was well ahead of forecasts, according to an industry report.
Jobs shed by US private employers in February dropped from the prior month, while US firms' planned layoffs fell to the lowest since 2006, suggesting the job market may be starting to recover.
European Commission President José Manuel Barroso said that Greece's extra €4.8 billion in spending cuts and tax increases, which equate to two per cent of gross domestic product, would be backed by European solidarity. "The market is responding positively, and quite rightly, to the Greek fiscal package," said Bob Parker, vice-chairman of asset management at Credit Suisse.
"There's a good correlation between equity markets, and the spread between German bunds and Greek bonds. Markets believe the negotiations are going to succeed."
"The services sector coming in ahead of expectations also helped," Mr Parker said. "There will be a positive US growth surprise in the first half of the year."
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 ended the day between 0.7 and 0.9 per cent higher.
Wall Street was higher around the time European bourses were closing. The Dow Jones, S&P 500 and Nasdaq Composite were up between 0.5 per cent and 0.6 per cent.
Energy and mining shares gained as the dollar weakened, boosting the price of metals and oil. Anglo American, Antofagasta, Kazakhmys, Lonmin and Xstrata rose between 3.7 percent and 5.7 per cent.
Dutch Shell and Repsol rose between 0.4 and 0.7 per cent. Prudential, up 2.6 per cent, was among insurers to rise. The company's shares fell 19 percent over the previous two sessions, after it agreed a $35.5 billion takeover of the Asian life business of AIG, requiring a $21 billion rights issue.
Legal & General rose 5.1 per cent. Aviva rose 2.9 per cent, ahead of full-year results today. Mobile telecoms heavyweight Vodafone gained 1.5 per cent as BofA Merrill Lynch added the stock to its influential "Europe 1" investment list.
Among other individual movers, Adidas, the world's No. 2 sports goods maker, lost 4.1 per cent. It said it is counting on the soccer World Cup and the revival of its Reebok brand to return it to growth this year after posting a weak finish to 2009.
Adecco, the world's biggest staffing company, rose four per cent after the company said its major markets of France and North America had returned to growth in the first two months of 2010 and that it expected conditions to improve further.