European shares rose back towards two-and-a-half-month highs yesterday, led by gains on the French stock exchange, as the region’s markets were buoyed by data showing the eurozone had emerged from recession.
The pan-European FTSEurofirst 300 index closed up by 0.3 per cent at 1,240.30 points, putting the index near its highest level since late May and back within touching distance of five-year highs of 1,258.09 points reached in May.
The eurozone’s blue-chip Euro STOXX 50 index also advanced by 0.4 per cent to 2,852.08 points while France’s CAC-40 index outperformed other major European markets with a 0.5 per cent rise that put the CAC at a 2-year high.
Traders said European stock markets had been boosted by data on Germany and France – the eurozone’s two powerhouses – had grown faster than expected in the second quarter.“French GDP (gross domestic product) was better than expected, and there is some talk of global money arriving in Europe as Europe claws its way out of recession,” said Rupert Baker, a European equity sales executive at Mirabaud.
MSCI’s all-country world index, a measure of 45 equity markets around the world, rose 0.05 per cent.
The euro traded 0.1 per cent lower at $1.3252, while the dollar edged slightly lower at 98.18 yen.
Sterling hit a high of $1.5548 after data showed a sharp drop in jobless benefit claims in July and minutes from the central bank’s last meeting revealed one policymaker had voted against a historic move to tie future interest rates to unemployment.
It was last up 0.5 per cent at $1.5519. The minutes and stronger labour market data prompted money market traders to price in a greater chance of a rate hike in the bank’s base rate in two years – a year earlier than the BoE has signaled.
In the US, Wall Street stocks were dragged down by weak earnings from department store Macy’s.
Macy’s reported a sales and profit miss in the second quarter and cut its full-year earnings forecast. The chain was forced to discount items as consumers limited their spending on non-essential goods.
Macy’s stock fell 4.2 per cent to $46.47, and was the largest percentage decliner on the S&P 500. The S&P’s consumer discretionary sector was down 0.8 per cent.
Trading volume has been among the lowest of the year, as earnings season winds down and investors try to determine when the Federal Reserve will start scaling back its stimulus.