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Insurers take Europe higher
LONDON, England -- Axa and other insurance companies helped push European equity markets to a higher close Tuesday, as a thin corporate and economic agenda left investors awaiting the U.S. Federal Reserve's latest economic prognosis. London's FTSE 100 closed up 0.21 percent up at 4,185.60, the Paris CAC-40 closed up 0.62 percent at 3,208.23, and Zurich's SMI ended up 0.93 at 5,049.60. At 1645 Frankfurt's Xetra DAX was up 1.25 percent at 3,381.32. By 1545 GMT, with only Frankfurt still officially trading, the FTSE Eurotop 300 index of pan-European blue chips was up 0.6 percent at 878 points, with advancing issues eclipsing decliners by nearly three-to-one. The scorching three-month comeback rally to June has made way for more modest gains -- with the benchmark Eurotop range-bound between 833 and 884 points since June 19 -- though the sharp correction anticipated by many during July has failed to materialize. The narrower DJ Euro Stoxx 50 index rose 0.7 percent to 2,496 points. More and more strategists were convinced that further equity gains were possible on the back of a continuing improvement, even at a moderate pace, in economic fundamentals, Reuters reported. But another equity buying spree was not expected before September, when more investors and market players have returned from their holidays. "We may be a in a classic summer lull but shares will break out on the upside in due course," Rupert Thompson, a global strategist at E+Trade, told Reuters. Thompson said investors did not so much hope to be surprised with better-than-expected macro news, but rather to see gathering evidence which confirms forecasts of a second-half pickup in U.S. economic growth to 3.5 to 4.0 percent. The bulk of U.S. data later in the week, including retail sales, consumer prices, industrial production and consumer sentiment data, may offer signs that recent improvements in confidence are being translated into concrete economic growth. Axa, France's number one insurer, gained 3.8 percent despite its first-half profit slumping by 75 percent due to securities writedowns and the weak U.S. dollar, as investors cheered forecast-topping core results and news that the group expected to beat a key underwriting profitability target by year-end. Other insurers including Allianz and ING Groep, which post results on Thursday, also rallied, gaining 3.4 and one percent respectively. In the technology sector, Germany's Infineon firmed 3.9 percent after a decision from the European Union to impose anti-dumping duties on South Korean chip rival Hynix. French peer STMicroelectronics ended 2.2 percent higher. But UK telecom operator BT Group was a black spot, slipping two percent on the threat of a tougher regulatory regime and stiffer competition from cable operators. British satellite TV company BSkyB also lost two percent after it declined to say when it would resume dividend payments, which overshadowed the release of strong full-year results.
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