Friday May 29, 04:49 PM
Oil-price surge boosts stock markets
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LONDON (AFP) - Europe's main stock markets rallied Friday, mirroring gains elsewhere, as soaring oil prices lifted the heavyweight energy sector and traders awaited key first-quarter US economic growth data.
In late morning trade, London's FTSE 100 index of leading shares jumped 1.29 percent to 4,443.97 points.
Frankfurt's DAX 30 (Xetra: news) gained 1.35 percent to 4,999.30 points and in Paris the CAC 40 (Paris: news) rose 1.47 percent to 3,311.82 nearing the half-way stage.
The DJ Euro Stoxx 50 index of leading eurozone shares advanced 1.19 percent to 2,482.44 points.
In the foreign exchange market, the euro soared to 1.4089 dollars, the highest point since December 31.
In reaction, oil prices bounced Friday above 66 dollars a barrel, approaching seven-month peaks, as the struggling US currency stimulated demand for dollar-priced crude.
Oil was also propelled higher by OPEC's decision to hold oil output, falling US crude reserves and global economic recovery hopes, traders said.
New York's main futures contract, light sweet crude for delivery in July, rallied to 66.01 dollars a barrel -- which was last seen on November 5.
"The FTSE has raced ahead this morning on the back of a strong night's trading in both the United States and Asia," said Mark Priest, senior trader at ETX Capital.
"It's the energy companies driving the index with strong performance across the board."
Higher oil prices boost the profits of energy giants such as Cairn Energy (Virt-X: CNE1.VX - news) and Total.
In London, exploration group Cairn Energy shares leapt 3.42 percent to 2,540 pence and Royal Dutch Shell (Amsterdam: RDSA.AS - news) shares gained 1.57 percent to 1,687 pence. In Paris, French oil group Total rose 2.20 percent to 40.95 euros.
Wall Street stocks advanced Thursday, lifted by a late rally as tensions eased on the bond market following news of robust demand for Treasury bonds.
The Dow Jones Industrial Average of 30 blue-chip stocks rallied 1.25 percent to finish at 8,403.80 points.
New York stocks had churned in a narrow range as investors digested a mixed batch of US economic data and details of a bankruptcy plan for General Motors (NYSE: GM - news) .
Later Friday, the recession-hit United States will release its first quarter growth data as well as a key consumer sentiment survey.
Markets widely expect US gross domestic product (GDP) to have fallen by a smaller-than-expected 5.5 percent in the first quarter from the 6.1 percent drop initially estimated, analysts said.
In Asia on Friday, Hong Kong rose 1.6 percent and Tokyo gained 0.75 percent after a string of mixed Japanese data and a late spurt of buying by oil and commodity investors.
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