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Europe soars on U.S. advance
LONDON, England (CNN) -- European markets soared Monday, supported by a strong start on Wall Street, amid hopes the war in Iraq was drawing to a close as U.S. forces entered central Baghdad. London's FTSE 100 rose 3.2 percent, or 121.4 points, to 3,935.8 and the CAC 40 blue chip index in Paris gained 3.4 percent, or 97.72 points, to 2,935.68. Frankfurt's electronically traded Xetra Dax was up 4.7 percent, or 124.06 points, to 2,778.13 in late trading (the German market was set to close at 1900 GMT). The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 3.4 percent. The AEX index in Amsterdam soared 5.7 percent, the MIB30 in Milan added 2.4 percent and the SMI in Zurich climbed 2.4 percent. "This rally was entirely to be expected given the reduction in the risk premium associate with the war," Andy Hartwill, global strategist at SG Securities, told Reuters. "However, we are not out of the woods yet and trading will be volatile and liable to setbacks yet, given the weak if not downright gloomy economic outlook for the euro zone." Michael Hartnett, director of European equity strategy at Merrill Lynch, added: "We expect the post-Iraq headlines to be dominated by fears of recession.'' In corporate news, Swiss miner Xstrata rose 11 percent to 532.43 pence after it agreed to buy Australian base metals and coal miner M.I.M Holdings for $3 billion. (Full story) British engineer Invensys jumped 22 percent to 12.6 pence amid hopes the battered firm might sell more assets to pay back debts and help it cope with tough trading conditions. Among the other top gainers Monday were TUI, Europe's biggest tourism company, which was up 11.9 percent to 10.90 euros in late Frankfurt trading. European aerospace giant EADS, which has been hampered along with other members of the airline sector, rose 9.2 percent to 8.31 euros Monday as war concerns eased. German airline Lufthansa was up 7.7 percent to 8.95 euros in late Frankfurt trading. In the U.S. on Monday, stocks rallied on optimism that the war in Iraq could be coming to an end. At 1430 GMT, the Dow Jones industrial average was up 178.71 points to 8,455.86 and the Standard & Poor's 500 index rose 18.32 points to 897.17, while the Nasdaq composite gained 35.37 points to 1418.88.
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