European stocks rise amid post holiday optimism

AP News
Posted: Dec 28, 2009 1:48 PM

European stock markets moved higher Monday as investors come back from a long holiday weekend to find Japanese markets hitting recent new highs.

In Europe, the FTSE-100 index of leading British shares remained closed for the Boxing Day holiday. In Paris, the CAC 40 index rose 0.71 percent to 3,940.54, closing in on 4,000 points, a level it last saw in October, 2008. Germany's DAX rose 0.74 percent to 6,001.30.

Gains were underpinned by optimism over improved holiday spending data in the U.S. as well as a jump in Japan's factory production, suggesting an economic recovery is gathering pace.

French nuclear engineering giant Areva SA was among the big French decliners after it was beat out for a $20 billion nuclear power contract in the United Arab Emirates by South Korean consortium Korea Electric Power Corp.

Areva shares fell 2.5 percent to euro342 on the news. The loss was a blow to Areva's so-called EPR nuclear reactor technology, which it is trying to export around the world.

Earlier markets in Asia were the first to resume trading after the Christmas holiday and investors focused on regional developments in the absence of cues from the U.S. or Europe.

Oil prices, meanwhile, held near $78 a barrel and the dollar was stronger against the yen and the euro.

Aiding sentiment in Asian stock markets was news that Japan's factory output rose the most in six months in November as a recovery in export demand from Asia boosted production of cars, flat screen televisions and other products in the world's second-biggest economy.

Japan's recovery from the world economic crisis has been undermined by deflation and strong yen but an improvement in demand for exports has raised hopes it can avoid slipping back into recession next year. The figures also showed that China's lavish stimulus spending is helping the region's recovery.

In Tokyo trade, the Nikkei 225 stock average closed up 139.52 points, or 1.3 percent, to 10,634.23 _ the highest finish since late August. Hong Kong's Hang Seng reversed course to end down 36.78, or 0.2 percent, at 21,480.22 while South Korea's Kospi advanced 0.2 percent to 1,685.59.

China's Shanghai benchmark jumped 47.43 points, or 1.5 percent, to 3,188.78 and Taiwan's market gained 1.1 percent. Thailand's SET index was up 0.2 percent. Markets in India, Australia and New Zealand remained closed.


Associated Press writer Shino Yuasa in Tokyo contributed to this report.