Wednesday, 07 June 2023 02:49 GMT

European shares rally as Frankfurt hits new record

(MENAFN- AFP) European equities rallied on Tuesday with star performer Frankfurt striking a record high following impressive company earnings and upbeat data, and after Australia cut interest rates.Germany's DAX 30 index of leading shares jumped as high as 8,197.72 points, surpassing its previous July 2007 record, with the market lifted by impressive factory orders data.Sentiment was further boosted after the Reserve Bank of Australia (RBA) cut interest rates to a record low in a surprise decision, one week after a reduction from the European Central Bank.Later the DAX stood at a closing record of 8,181.78 points, up 0.86 percent from Monday.Elsewhere, London's FTSE 100 index of leading companies rose by 0.55 percent to 6,557.30 points, while in Paris the CAC 40 gained 0.37 percent to 3,921.32 points.On Wall Street, the markets mostly moved higher.At around midday, the Dow Jones Industrial Average rose 0.28 percent, while the S&P 500 added 0.18 percent, but the tech-rich Nasdaq Composite Index slipped 0.04 percent."The German DAX index has finally caught up with its US counterparts -- the Dow and S&P 500 -- in climbing above the 2007 highs," said GFT Global Markets analyst Fawad Razakzada."Investors are piling into equities ... with the RBA becoming the latest major central bank to further loosen its policy overnight."He added: "Low interest rates discourage investment in fixed income, making equities attractive alternatives."Major European markets had been slightly weaker on Monday, with London closed, as investors digested solid gains that were notched up last week following the ECB rate cut and upbeat US non-farm payrolls data.Tuesday saw a raft of upbeat quarterly earnings reports from DAX heavyweights such as insurers Allianz and Munich Re.Allianz shares gained 3.56 percent to 120.70 euros, while Munich Re shares edged up 0.65 percent to 149.25 euros.In Paris, Societe Generale's share price surged 5.68 percent to 30.14 euros, as traders shrugged off falling quarterly profits to focus on the French bank's new cost-cutting drive.And in London, Asia-focused banking giant HSBC gained 2.96 percent to 735 pence.HSBC announced that net profits more than doubled to $6.35 billion (4.86 billion euros) in the first quarter, aided by tumbling bad debts and cost cutting.Asian stocks traded mixed Tuesday, but Tokyo scored its highest closing level in almost five years after a four-day holiday weekend.Tokyo leapt 3.55 percent to 14,180.24 points -- its best finish since June 2008 -- as investors caught up with last week's positive newsflow, dealers said.Tokyo rocketed on its first day of trading following the Golden Week break, aided by a United States Labor Department report on Friday that said the US economy added 165,000 jobs in April.The department also revised sharply upwards its jobs figures for the previous two months, helping to lower the unemployment rate to 7.5 percent.Sydney stocks however lost 0.24 percent despite news of the RBA rate reduction.Last Thursday, the ECB cut its key interest rate to an all-time low of 0.50 percent -- a decision that came after Tokyo had closed for the holiday period.In foreign exchange activity on Tuesday, the European single currency firmed to $1.3085, from $1.3074 late in New York on Monday.On the London Bullion Market, gold fell to $1,444.25 an ounce from $1,469.25.

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