5 May 2009

Europe shares hit 16-week high

5:45 am on 5 May 2009

European stock markets rallied on Monday as economic data suggested that the recession might be moderating.

The FTSEurofirst 300 index of top European shares ended up 1.6% at 842.70 points - its highest close since 12 January.

Shares in Fiat rose 8.1% after the Italian carmaker launched a plan to swallow the European operations of General Motors, notably Opel, to create a listed European automotive group.

The energy sector was also upas crude oil prices rose 1.2% to amost $US54 per barrel.

Shares in Frontline, the world's largest oil tanker shipping company, rose more than 25%.

Manufacturing activity grew in China and India in April, and declined at its slowest pace in six months in the euro zone. Other data showed pending sales of existing homes in the United States rose unexpectedly in March.

However, the European Commission, forecast that the economy of the euro currency zone would shrink 4% this year and by 0.1% in 2010.

Shares in steelmaker ArcelorMittal rose 12.5%.

In Frankfurt, the DAX index ended at 4902.45 points, up 133 or 2.79 %. In Paris, the CAC-40 index closed at 3237.97 points, up 78.12 or 2.47%.

The Swiss market index closed at 5318.34 points, up 92.42 or 1.77 percent.

London & Toyko closed

Markets in London were closed for a bank holiday. On Friday the FTSE 100 closed at 4,243.22, down just 0.49%.

Financial markets in Japan remain closed until 6 May for a series of national holidays. Last Friday, the Nikkei rose 149.11 points to 8,977.37, its highest finish since 7 January.

In Hong Kong, the global Hang Seng Index ended 860.06 points higher, 5.5%, at 16,381.05 - its highest level since mid-October 2008.

In Australia, shares jumped 3% to their highest close in nearly six months after a delay was announced in the government's carbon emissions trading scheme.

The S&P/ASX 200 index firmed 113.4 points to 3,883.0, building on a rise of 1.5% in the index last week. It was the highest close since 12 November.

The All Ordinaries increased 108.1 points, or 2.89%, to 3846.

In New Zealand, the NZX50 was up 46 points, or 1.7%, at 2766 on turnover of $70 million.