Europe shares hit 18-month high on upbeat data

By Harpreet Bhal

LONDON (BestGrowthStock) – European shares rose in early trade on Thursday, hitting fresh 18-month highs as upbeat manufacturing data from Europe and China fueled optimism about the global economic recovery, with banks and miners rising.

By 0839 GMT, the pan-European FTSEurofirst 300 index of top shares rose 1 percent to 1,089.13 points, the highest level since early October 2008. Volumes were low, at 16 percent of the daily average for the previous 90 days, as Europe heads into the Easter holiday weekend.

The index, which is up around 69 percent from its record low in March 2009, gained 3.1 percent in the first quarter after rising in the previous three quarters.

Banks were the biggest gainers on the index, with Barclays, HSBC, Societe Generale, BNP Paribas and Deutsche Bank up 0.5 to 1.3 percent.

Manufacturing activity in the euro zone grew at its fastest pace in over three years last month, and faster than previously recorded, as output continued its upwards march, a survey showed on Thursday. Two business surveys showed China’s manufacturing sector moved up a gear last month as orders rose, signaling brisk first-quarter GDP growth.

“The data looks encouraging. The knock-on effect is in terms of Chinese expenditure. You’ve seen more imports going into China as a result of a lot of the infrastructure work being done and that impacts directly into a lot of European companies,” said Justin Urquhart Stewart, director at Seven Investment Management.

Miners were also higher, supported by stronger metals prices which rose on improving demand sentiment. Anglo American, Kazakhmys, BHP Billiton, Xstrata and Rio Tinto were up 1.5 to 2.6 percent.

Among individual movers, Technip was up 2.8 percent. The company said it won two contracts worth a combined 115 million euros from Hindustan Petroleum Corporation Ltd. for a diesel hydrotreater project in the Visakh refinery, on the east coast of India

BMW rose 2.8 percent after Credit Suisse upgraded the stock to “outperform” from “underperform” and raised its price target.

Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 rose 0.7 to 1 percent.

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Highlighting the improving manufacturing activity in the euro zone, a jump in output and new orders helped German manufacturing activity to expand in March at its fastest pace since April 2000

In Switzerland, the manufacturing sector hit its highest level in three years, and France’s factory activity grew at by its fastest pace in 40 months.

British manufacturing activity grew last month at its fastest rate since October 1994, when the economy was also recovering from a deep recession, a survey of purchasing managers showed.

Focus later in the session is likely to turn to U.S. initial jobless claims which will be keenly watched ahead of the key nonfarm payrolls numbers due on Friday when major equity markets are closed.

On Wednesday, a U.S. private sector employment report showed employers unexpectedly shed jobs in March, dampening hopes about the strength of the country’s economic recovery.

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(Editing by Hans Peters)

Europe shares hit 18-month high on upbeat data