European shares extend rallyComment on this story
Paris - European shares inched higher on Monday, building on last week's rally and tracking gains on Wall Street and in Asia in the wake of reassuring US jobs data.
Euro zone peripheral markets continued to outperform, pushing Madrid's IBEX up 0.5 percent and Milan's FTSE MIB up 0.3 percent, as investors bet euro zone peripheral markets are set to most benefit from measures unveiled by the European Central Bank last week.
The ECB cut interest rates, launched a series of measures to pump money into the euro zone economy and pledged to do more if needed to fight off the risk of Japan-like deflation, sparking a rally in European equities.
Euro zone peripheral markets have strongly rallied since the start of the year, with the MIB and IBEX up 18 percent and 12 percent respectively since the start of the year, outpacing UK's FTSE 100 up 1.8 percent, and Germany's DAX, up 4.6 percent over the same period.
At 10:00 SA time on Monday, the FTSEurofirst 300 index of top European shares was up 0.16 percent at 1,390.97 points, while the euro zone's blue-chip Euro STOXX 50 index was up 0.1 percent at 3,296.42 points, after hitting a near-six year high earlier in the session.
“A lot of indexes have crossed above key resistance levels last week, and the positive trend continues,” Saxo Banque trader Pierre Martin said.
“Overall, it's a great scenario for equities: very low interest rates, very low inflation, and the US and European economies in recovery mode.”
Trading volumes were expected to be thin on Monday in Europe due to a public holiday in a number of countries including Germany and France, but equity markets will be open across the region, apart from a few countries including Switzerland, Austria and Greece.
Shares in France's Gecina dropped 3.2 percent after Spanish builder Metrovacesa said it agreed to sell its 27 percent stake in the firm at a discount.
“Considering that the deal seems to be at the same price level as several months ago, and that it is not an attractive price for Metrovacesa, it is likely that the Spanish company is in a hurry to get fresh cash for its refinancing,” Societe Generale analysts wrote in a note. - Reuters