Hopes of short war sparks rally
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Investors wait for clues as to how the conflict in Iraq will affect stocks.
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LONDON, England (CNN) -- European stock markets rose in Friday morning trading, taking a broadly positive view of early reports from the U.S.-led attack on Iraq.
Officials in the United States and Britain said their assault on Iraqi President Saddam Hussein's regime was going well, as armored units pushed into southern Iraq with initial limited resistance.
London's FTSE 100 index climbed 2.0 percent, and the Frankfurt electronically-traded Xetra Dax was up 2.1 percent. In Paris, the CAC 40 rose 2.7 percent, and Zurich's SMI added 2.9 percent.
Traders said the market's fortunes in the near term would be driven by the progress of the war in Iraq. Investors have driven European markets higher in the past week, on hopes that a long war could be avoided.
The pan-European FTSE Eurotop 300, an index of the region's biggest companies, was up 2.31 percent to 805.
Banking and financial stocks were among the biggest gainers on Europe's main markets. Deutsche Bank rose 4 percent in Frankfurt, while Swiss bank UBS added 3.5% and reinsurer Swiss Re was up 3.3%.
A short war would rekindled hopes for recovery in the economies of Europe and the United States, relieving the pressure on beleaguered banks and insurers.
U.S. markets closed higher in nervous trading on Thursday. The Dow Jones industrial average rose 0.26 percent, its seventh straight daily gain. (Wall St. plays it safe)
The U.S. caution had a knock-on affect on Asian markets, as well as investors being were torn between expectations that the war could end swiftly and worries about possible torching of oil wells, terror attacks, chemical warfare or a worsening of the North Korean crisis. (Full Story)
