European stocks rose for a third week as optimism grew that the worst of the global recession is over after reports showed the US economy lost fewer jobs than expected and Chinese manufacturing expanded for a third month last month.
Rio Tinto Group, the world’s third-largest mining company, gained 7.2 percent after raising US$21 billion from a share sale and an iron ore venture with BHP Billiton Ltd.
Renault SA and PSA Peugeot Citroen led a rally among automakers after French car sales advanced 12 percent last month as a government-backed bonus program enticed consumers.
Europe’s Dow Jones STOXX 600 Index rose 1.2 percent to 210.76 this past week, having risen for all but one of the last six weeks. The measure has gained 33 percent from a 12-year low on March 9 amid optimism that government action will help end the first global recession since World War II.
“The market is resuming its gains in a healthy manner, driven by improvements in the economy,” said Bruno Ducros, a fund manager at Cardif Asset Management in Paris, which oversees about US$2.6 billion in stocks. “Rio Tinto found a way to finance itself and that’s good.”
National benchmark indexes rose in 15 of the 18 western European markets. The UK’s FTSE 100 rose 0.5 percent, while Germany’s DAX gained 2.8 percent and France’s CAC 40 increased 1.9 percent.
UBS AG strategists reversed their preference for US stocks over European equities for the first time since 2007, saying US stocks look relatively expensive as the earnings gap between the two regions narrows. The brokerage raised its recommendation on European stocks to “overweight” and reduced US shares to “underweight.”
The European Central Bank and the Bank of England maintained their benchmark interest rates at record lows this past week.
European Central Bank President Jean-Claude Trichet said the bank had no immediate plans to boost its 60 billion euro (US$84 billion) asset-purchase program or cut interest rates further as the economy shows signs of recovery.
NYSE Euronext CEO Duncan Niederauer said he was “a lot more confident” the three-month rally in equities would be sustainable as trading volume increased.
“At the end of March I was apprehensive because I thought the market had gone up so much so quickly that it didn’t feel like a fundamentally driven rally to me,” Niederauer said in an interview in Amsterdam on Wednesday.
“I was nervous that the fundamentals hadn’t really changed and we hadn’t seen enough volume,” he said.
ANNOUNCEMENT: People who do not comply with the ban after a spoken warning would be reported to the police, the airport company said on Friday Taoyuan International Airport Corp on Friday announced that riding on vehicles, including scooter-suitcases (also known as “scootcases”), bicycles, scooters and skateboards, is prohibited in the airport’s terminals. Those using such vehicles should manually pull them or place them on luggage trolleys, the company said in a Facebook post. The ban intends to maintain order and protect travelers’ safety, as the airport often sees large crowds of people, it said, adding that it has stepped up publicity for the regulation, and those who do not comply after a spoken warning would be reported to the police. The company yesterday said that
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