Autos steer European stocks up
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LONDON, England (Reuters) -- European blue chips with the aid of German auto makers Porsche and Volkswagen ended up on Wednesday as investors shrugged off the weak dollar to focus on stronger growth and company profits.
Banks joined the party with Deutsche Bank up 5.5 percent after Standard & Poor's revised its outlook to stable from negative, citing the bank's performance so far in 2003.
Europe's biggest drugmaker GlaxoSmithKline rose in early trade after it highlighted 20 potential new blockbusters to drive future sales growth and lift it out of a lean patch for research productivity.
But the stock later slipped 1.5 percent on disappointment about a lack of drugs moving from Phase II to final Phase III clinical trials announced at a long-awaited research meeting and delays to a top cancer drug.
The FTSE Eurotop 300 index of pan-European blue chips closed up 0.39 percent at 944.59 points just four points below Tuesday's high for 2003. Volumes were good on a day when the ratio of gainers to losers was around three to one.
The DJ Euro Stoxx 50 index was up 0.89 percent at 2,690.82 points.
"People looking ahead to next year feel optimistic,'' said John Hatherly, head of global analysis at M&G Asset Management.
"Dollar weakness is likely to work against European companies, but we have seen a lot of restructuring which should drive earnings forward.''
Attractive values
The euro rose by default to a lifetime high of $1.2128 as currency markets fretted that economic recovery would do little to help the trade and budget imbalances in the United States.
"A lot depends on how far the dollar falls and whether that offsets general optimism about economic growth,'' said Hatherly.
For now investors prefer to focus on good news like the rise in U.S. new car and truck sales in November from a weak October.
The Institute for Supply Management's non-manufacturing business activity index down at 60.1 in November from 64.7 in October only briefly prompted traders to mark down equities.
On Wall Street, the Dow Jones industrial average was up 0.80 percent at 9,932.68 points, while the tech-laden Nasdaq Composite was up 0.78 percent at 1,995.47.
On Thursday U.S. weekly jobless claims data could provoke another assault on 2003 highs.
"We're still positive,'' said Morgan Stanley strategist Teun Draaisma. "Markets are still attractively valued and growth is still good and strong in all the leading indicators.''
The European Central Bank is expected to leave rates on hold at two percent on Thursday. But markets will listen to the news conference for comments on future direction.
Britain's FTSE 100 closed up 0.30 percent at 4,392.0 points, France's CAC rose 0.87 percent to 3501.93 and the Swiss SMI was up 1.16 percent at 5,440.7.
Better profits
Germany's Xetra Dax led Europe higher with gains of 1.74 percent to 3,875.66 as Volkswagen picked up 3.2 percent after a European Union court cancelled a 30 million euro fine for price fixing.
Porsche, the world's most profitable carmaker, jumped 6.2 percent after predicting higher sales this business year from last and DaimlerChrysler rose two percent.
German industrial conglomerate Siemens rose 3.3 percent on news that SBS, its troubled IT services arm may reach an operating margin target of five to six percent this year.
Meanwhile Italian bank Capitalia was up 4.4 percent to the highest since May 2002 on optimism that 2004 results could beat expectations.
Miners were cheered by news gold was trading close to its highest level in almost eight years, holding above $400 an ounce.
Sector leader Rio Tinto, BHP Billiton and Lonmin all advanced around 1.5 percent.
French reinsurer Scor ended up 10.6 percent after Standard & Poor's raised its credit rating on the company and a new rights offering was priced low enough to attract investors.
On the downside, British-based fund manager Amvescap fell 3.4 percent after U.S. officials investigating the mutual fund industry filed civil charges against its Invesco unit.
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Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
