(MENAFN- Gulf Times) European equities climbed on Wall Street's coattails yesterday as the Dow shot above 18,000 points for the first time on stellar US growth figures, while the euro slumped.
London's benchmark FTSE 100 index rose 0.14% to close at 6,585.93 points and in Paris the CAC 40 jumped 1.42% to 4,314.97 points.
Meanwhile Frankfurt's DAX 30 climbed 0.57% to 9,922.11 points in its last trading day before the Christmas holiday.
Early in the day European investors were cheered by US stock indices having hit new records on Monday as the markets still reacted to a likely reprieve from US interest rate hikes until mid-2015.
Then the release of data in the afternoon showing that US growth surged to its highest level in 11 years in the third quarter helped bolster trading.
Gross domestic product increased 5% between July and September in the Commerce Department's third estimate for the period, up from the 3.9% previously estimated.
Analysts had expected GDP growth of 4.3%.
That propelled the Dow Jones Industrial Average above the 18,000 level for the first time when Wall Street opened.
The Dow stood at 18,041.30 points nearing midday, a gain of 0.46% from Monday's record close.
The broad-based S&P 500 also pushed further into record territory, gaining 0.25% to 2,083.78 points, but the tech-heavy Nasdaq Composite index dipped 0.11% to 4,776.20 points.
"Christmas Day isn't until Thursday, but no one told the USA as impressive GDP figures led to an early influx of presents for the US markets," said analyst Connor Campbell at Spreadex.
But CMC Markets analyst Michael Hewson noted that the strong growth figures might lead to a return of concerns that the US Federal Reserve will raise interest rates early in 2015, which had sent markets tumbling earlier this month.
"What this data does do is raise expectations that the Fed might find it much more difficult to resist calls for tighter policy as we head into 2015 irrespective of the deflationary effects of the recent falls in the oil price," Hewson said.
Surging US growth also pushed the dollar higher, with the euro slumping to a new two-year low of $1.2165.
The euro later stood at $1.2179, down from $1.2226 late on Monday.
In London Bullion Market, gold fell to $1,175.75 per ounce from $1,195.25 on Monday.
Trading was thin in Europe yesterday with many investors away for an extended festive break for Christmas and New Year holidays.
London and Paris hold shortened trading sessions on Wednesday while Frankfurt is closed. All three reopen for business on Monday.
In Asia equity trading China led a slump yesterday, with Shanghai registering one of its biggest percentage falls of the year and banks among the biggest losers there.
Dealers said a recent run-up following a surprise Chinese interest rate cut had created room for a market correction.
Shanghai dived 3.03% and the Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.39%.
Hong Kong ended down 0.32%, Sydney dropped 61.1 points and Seoul slipped 0.21%. Tokyo was closed for a public holiday.
"The (Shanghai) market climbed too fast in such a short time after the November interest rate cut, which has caused some structural problems in the market," Shenyin & Wanguo Securities analyst Gui Haoming told AFP.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.