Commodities fuel rally in European bourses

(MENAFN- Gulf Times) Share prices of mining groups surged on yesterday as commodity markets steadied on signals of Chinese stimulus, providing a pre-Christmas bounce to European stock markets.
With London, Frankfurt and Paris all closing with gains of more than 2%, a so-called Santa rally of buoyant pre-holiday trading finally set in.
London's FTSE 100 was up 2.6% at 6,240.90 points at close; Frankfurt's DAX 30 jumped 2.3% at 10,727.64, while Paris' CAC 40 gained 2.3% at 4,674.53.
The EURO STOXX 50 was UP 2.3% at 3,286.52.
"Stock markets have been encouraged by a stabilisation in commodity prices which has picked up steam since the Chinese government announced plans to increase its budget deficit next year," said market analyst Jasper Lawler at CMC Markets UK.
Miners were the top gainers on London's FTSE 100 index of leading shares.
Anglo American jumped 9.1%, Glencore was close behind with an 8.5% gain, while BHP Billiton advanced 6.9%.
Oil stocks were also robust as crude futures recovered from 11-year lows hit earlier in the week. BG Group jumped 6.3%, BP climbed 4.5% and Royal Dutch Shell's A shares rose 4.4%.
Meanwhile Madrid's IBEX 35 index continued its recovery from heavy losses at the start of the week, winning 2.4% even though conservative Prime Minister Mariano Rajoy's bid to form a new government following an inconclusive weekend election received a setback when the Socialists refused to support him.
In foreign exchange, the euro dropped to $1.0878.
Asian stock markets meanwhile extended their gains yesterday, with buying supported by Tuesday's Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world's top economy.
The figures calmed some nerves on global markets after traders had grown concerned about the outlook owing to recent plunges in oil prices and weakness outside the US, particularly in China.
Last week's euphoria over the Federal Reserve's interest rate rise, which had boosted overall confidence in the economy, had also started to give way to caution about the US central bank's plans for its next rise.
Wall Street pushed higher yesterday on data that showed strong consumer spending in November, with the Dow Jones Industrial Average up 0.7% in midday trading.