European shares higher on German manufacturing; DAX up 3%
Published Jan 02, 2012 12:54PM ET
At the close of European trade, the EURO STOXX 50 was higher by 2.32%, France's CAC 40 advanced 1.98%, while Germany's DAX 30 climbed by 3.00%. Meanwhile, in the U.K. the FTSE 100 was closed for the New Year holiday.
The German purchasing manager's index advanced to 48.4 in December surpassing the average economist estimate of 48.1. This bullish news spurred equity buying across the board.
Arnaud Scarpaci of Agilis Gestion SA explained the bullishness to Bloomberg, "On the first day of the year, a lot of investors, having cleaned their portfolios, have liquidity to invest. People are investing in industries with lots of visibility, such as utilities."
However, the euro zone debt overhang continues to cast a bearish aura over region's stock markets.
ThyssenKrupp, Germany's largest steel maker, surged 4.5% on the improved economic numbers.
Solar companies also participated in the bullish advance with Sunways AG jumping 21% , Wacker Chemie advancing by 6% and SolarWorld adding 3.1%.
Automakers led the rally higher with Daimler AG climbing 4.8% after announcing its goal of producing a record 988110 vehicles in 2012.
On a bearish note, Storebrand ASA dropped 3.5% after insurance companies were hit with 6000 claims due to storm Dagmar striking Norway over the Christmas holiday.
U.S. stock markets were closed for the New Years holiday.
Investors are awaiting US payroll reports this week to verify the improved trend in the world's largest economy.
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Written By: Investing.com
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