Arab Today, arab today european stocks rally on eurozone optimism
Last Updated : GMT 03:14:56
Arab Today, arab today
Arab Today, arab today

European stocks rally on eurozone optimism

Arab Today, arab today

Arab Today, arab today European stocks rally on eurozone optimism

London - AFP

European shares rallied on Friday, boosted by optimism over a solution to the eurozone debt crisis at next week\'s crucial EU summit, and before publication of US jobs data later in the day. London\'s FTSE 100 index leapt 1.38 percent to 5,564.85 points, Frankfurt\'s DAX 30 rose 1.24 percent to 6,110.95 points and the Paris CAC 40 won 1.29 percent to 3,170.11. Milan added 1.70 percent and Madrid jumped 1.46 percent. In foreign exchange deals, the European single currency climbed to $1.3487, compared with $1.3461 late in New York on Thursday. Tensions on the eurozone bond market have eased significantly. European Central Bank president Mario Draghi insisted on Thursday that the bank could not act as lender of last resort and that its actions to support the eurozone debt market were limited, but also signalled that if EU governments ensured budget discipline, then the central bank might have extra room for manoeuvre. \"The eurozone crisis continues to be the financial markets\' main focus and they remain expectant that the EU summit will deliver plans to resolve the sovereign debt and banking problems,\" said VTB Capital analyst Neil MacKinnon. However, he cautioned: \"As has been the case many times before, EU policymakers have a reputation for ramping up market expectations before then failing to deliver.\" German Chancellor Angela Merkel said in a major speech on Friday that the eurozone was already taking steps to create a fiscal union. President Nicolas Sarkozy declared on Thursday that France and Germany would push to give the European Union a new treaty to restore tough budgetary discipline on the debt-ravaged eurozone. The French leader warned the developed world was entering a \"new economic cycle\" dominated by debt reduction, and thus of tough times ahead. \"Europe will have to make crucial choices in the weeks to come,\" he declared. \"We must confront those who doubt the stability of the euro and speculate on its break-up with total solidarity. France is fighting so that Europe can still make it voice heard in the world of tomorrow.\" Sarkozy expressed confidence that the ECB would take extra action in a new climate of budget discipline, and said he would meet Merkel on Monday to agree upon and announce a joint plan to take to the EU summit on December 8 and 9. \"There is some fresh optimism on the back of Sarkozy\'s inspiring speech yesterday to bring about a new treaty based on budget discipline and Mario Draghi\'s comments of potentially greater ECB involvement should greater fiscal union be achieved,\" said City Index analyst Joshua Raymond. \"Investors are starting to connect the dots between the two statements and it is this, aligned with fresh optimism that we could see a strong US payroll numbers this afternoon, (that) is lifting European indices. Asian shares mostly rose on Friday, although trade was quiet as investors eased off after the previous day\'s huge gains. Hong Kong added 0.20 percent, Tokyo gained 0.54 percent, Sydney jumped 1.40 percent and Seoul closed flat, while Shanghai retreated by 1.10 percent. Chinese figures showing manufacturing contracted for the first time in almost three years highlighted the fragile state of the global economy. CMC Markets analyst Michael Hewson meanwhile warned that stock market gains could prove temporary if the summit fails to deliver. \"Talk of greater fiscal integration and no defaults for creditors have soothed investor sentiment,\" Hewson told AFP. \"For now the risk of a messy implosion appears to be have been deferred temporarily giving a boost to stocks ahead of this afternoon\'s US employment report. \"This is likely to be temporary if nothing concrete comes out of the December summit.\" European stocks retreated on Thursday, giving up some of the stellar gains made on Wednesday, after top central banks pumped dollar liquidity into the banking system to avert a global financial crisis. However, investors continued to draw strength from the surprise central bank action. Markets were buoyed after the central banks of the United States, the eurozone, Britain, Japan, Canada and Switzerland cut the cost of providing dollars to banks, giving more liquidity to financial markets. The move came as European banks struggle to find cash on the markets due to concerns over the eurozone debt crisis, which is threatening Italy, Spain and even France. \"More than anything, it was the coordinated nature of the central bank action which raised sentiment,\" noted GFT analyst David Morrison. \"This has raised hopes that Europe\'s leaders will now also act in a cooperative fashion.\" Investors were awaiting the release Friday of US November non-farm payroll data for an indication of the state of the world\'s biggest economy.  

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