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European stocks hit fresh peaks
LONDON, England (Reuters) -- Europe's top shares closed higher for a sixth straight session on Monday, with insurers and tech companies leading the march, while solid U.S. manufacturing figures added to hopes of a sustainable economic recovery. Dutch insurer Aegon led its sector higher as the perception that recent market gains were increasing the value of their equity portfolios lured investors. Ahold surged nine percent as dealers cited reports that a price war begun last month by the Dutch retail giant's domestic chain Albert Heijn was luring customers back to its outlets. Investors also returned to the stock, which has fallen 40 percent since the start of the year amid concern surrounding a one-billion euro accounting scandal at its U.S. operations. The FTSE Eurotop 300 index ended 1.5 percent higher at 936.5 points, its highest close since December 2, 2002. Improving economic data and corporate earnings have hoisted the Eurotop 300 about 37 percent above mid-March's six-year low and pushed the index about nine percent above break-even for the year. The narrower DJ Euro Stoxx 50 index rose 2.2 percent to 2,632 points. London's FTSE 100 ended 1.1 percent higher at 4332, while Paris' CAC-40 finished two percent higher at 3439. Frankfurt's DAX jumped 2.4 percent, finishing 3744. Paris's CAC-40 and Frankfurt's DAX both closed at a 14-month peak. Frankfurt closed at 1630 GMT on Monday, bringing it in line with the rest of Europe's main bourses. Strategists said more gains may be in the offing, as fresh U.S. economic reports topped economist forecasts and fueled hopes of improvements in company balance sheet. A report showed on Monday that U.S. manufacturers had raised output in October to the highest level in nearly four years and slowed the pace of lay-offs, with the Institute for Supply Management's index coming in at a forecast-beating 57.0. "The numbers look terrific. It's hard to see the European stock market falling back much," said HSBC equity strategist Kevin Gardiner. Gardiner said the fact that European economies still lagged that of the United States left room for new equity gains this side of the Atlantic. "We do feel that in the U.S. things have been so good that they can almost only deteriorate really... But in Europe we've only really seen the beginning of economic revival. Certainly Europe is where the relative attraction is," he said. Over on Wall Street, the Dow Jones industrial average rose 0.8 percent to 9,883 points while the tech-laced Nasdaq Composite rose 1.5 percent to 1,961 points by 1700 GMT. INSURERS, TECHS LEAD RALLYInsurers -- high-beta stocks that amplify market moves -- led market gains, with Aegon and German peer Allianz rising by around four percent each. Technology shares also shone as industry data showing that global sales of semiconductors in September had risen to an all-time peak set three years ago, fueled buying of stocks such as France's STMicroelectronics and German peer Infineon. Dutch chip equipment maker ASML also closed six percent higher. French consumer electronics firm Thomson was in the spotlight after it said it planned a television and DVD joint venture with a Chinese firm which would be the world's biggest TV maker. But its shares gave back most of their session gain to close only 0.5 percent higher. Elsewhere, economy-sensitive carmakers motored ahead, with Volkswagen and BMW up 2.9 percent and 3.9 percent respectively, as brighter economic prospects and a weaker euro fueled hopes of more buyers for European cars. On the downside, Irish discount airline Ryanair dipped 2.2 percent after it beat forecasts for its third-quarter earnings but said it remained cautious about fares and yields for the rest of the year. Royal Bank of Scotland slipped 2.1 percent. Commerzbank analyst James Eden said the stock had been hit by a weekend media report it could make a $7.6 billion bid for U.S. bank Sovereign Bancorp. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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