European stocks shoot up, start 2011 with a ‘bang’

Europe’s leading stock markets leapt on Tuesday in a robust start to the new year following a mixed 2010 amid the eurozone’s lingering debt crisis.

By (AFP)

• Follow us on
• 
• 
• 

Published: Tue 4 Jan 2011, 6:16 PM

Last updated: Tue 30 Jun 2020, 2:30 PM

London’s FTSE 100 soared 2.33 percent to 6,037.53 points early on its first trading day of 2011, after sharp gains for the Frankfurt and Paris stock markets on Monday.
‘The FTSE 100 started the year with a bang,’ said Joshua Raymond, an analyst at City Index trading group.
‘Whilst inevitably some may be drawn to the positive start as a signal of intent by investors for 2011, the FTSE is playing catch up to US and European markets which closed higher yesterday, and investors are buying back into the oversold falls suffered on Christmas Eve.
‘Make no mistake however, it’s another strong start to the year for the UK markets,’ he added.
Investors in London shrugged off an increase in Britain’s standard rate of sales tax, or VAT, to 20 percent — one of several government moves aimed at slashing a record public deficit.
Finance minister George Osborne insisted that the rise from a rate of 17.5 percent starting on Tuesday was a ‘reasonable’ step towards economic recovery and would raise 13 billion pounds (20.2 billion dollars, 15.1 billion euros) per year.
In Frankfurt, the DAX 30 index climbed 0.31 percent to 7,011.05 points and the Paris CAC 40 advanced 0.71 percent to 3,928.67 points by mid-day.
The Stoxx 50 index of leading eurozone companies advanced by 0.63 percent to reach 2,857.45.
Wall Street stocks kicked off their year on Monday with strong gains as confidence in the US economic recovery was bolstered by new manufacturing data.
After two weeks of languid holiday trade, investors returned to the trading floor in high gear, with the Dow Jones Industrial Average rising 0.81 percent to close at 11,670.75 points.
Howard Wheeldon, an analyst at BGC brokers, noted that the US economy was ‘back on the front foot’.
He said: ‘True, during this year we may expect that like other global markets US equities and bonds will be affected to a greater or maybe lesser extent by following moves in the burgeoning European sovereign debt crisis.’
He added: ‘Perhaps though by not nearly as much as European markets themselves might be hit. Whilst some European events do hurt US market confidence it is reasonable to say that the US economy is far less impacted by events that occur over here in Europe.’
In Asia on Tuesday and boosted by the rally on Wall Street, Tokyo’s Nikkei marked the highest close since May, rising 1.65 percent to 10,398.10 points on its first trading day of 2011.