December 24, 2013 / 1:28 PM / 4 years ago

UPDATE 1-European shares post best pre-Christmas week since 1999

* FTSE 100 up 0.2 pct, CAC 40 up 0.1 pct in shortened trade

* Germany, Switzerland, Italy closed for the day

* Bright economic picture fuels post-Fed rally

* Brisk inflows going into European equities

By Alistair Smout

LONDON, Dec 24 (Reuters) - European stocks edged up on Tuesday, adding to the best run-in to Christmas since 1999, although trading in the shortened session was thin.

Many centres such as Germany, Switzerland and Italy were already closed for the Christmas break.

At the close, Britain’s FTSE 100 index was up 0.4 percent, France’s CAC 40 up 0.1 percent, and Spain’s IBEX up 0.6 percent.

The euro zone blue chip Euro STOXX 50 was up 0.1 percent at its provisional close, although not all stocks on the index had been open for trading.

For the five days leading up to the Christmas break, it is up 4.5 percent, the best week before the holiday since 1999, Thomson Reuters data showed.

The index is up 16.6 percent in 2013 - roughly 20 percent on a total returns basis - with just a few sessions remaining before the end of the year. If maintained, it would be its best performance in four years, mostly propelled by the massive amounts of cash central banks have pumped into the global economy this year.

Recent gains, however, have come in a week where the Federal Reserve has slowed its unprecedented monetary easing, with investors taking heart from stronger economic data and the U.S. central bank’s commitment to interest rates low for longer.

Late in Monday’s session, a survey showed that U.S. consumer sentiment rose to its strongest in five months in December as Americans’ outlook on the economy and job prospects improved.

“European markets are extending gains higher after better than expected US economic data released yesterday which further reinforces the Fed’s stance of curtailing its bond buying programme, boosting market sentiment for risk assets,” Kash Kamal, research analyst at Sucden Financial, said.

“Stronger than expected Q3 GDP growth in the US and UK and stable growth in the eurozone... have encouraged investors who were previously on the sidelines to return to equity markets as annual gains across major global indices push to their highest levels since 2009.”

Wall Street’s Dow Jones industrial average and S&P 500 as well as Germany’s DAX are all trading at all-time highs, while the EuroSTOXX 50 is just 0.9 percent off two-year highs.

According to data from fund-tracking EPFR Global, European equity funds have enjoyed net weekly inflows for 25 weeks running.

In the week ending Dec. 18, even as investors pulled $3.4 billion from global equity funds in the run-up to the U.S. Federal Reserve’s decision to start trimming its massive stimulus, investors continued to pour in money into European stocks, EPFR data showed.

At the close, volumes were extremely low, representing about 16 percent of the daily average on the FTSE 100 and 21 percent on the CAC 40.

London’s stock market will close at 1230 GMT on Tuesday, while Euronext markets in Paris, Amsterdam, Lisbon and Brussels will close at 1300 GMT. Madrid will also close at 1300 GMT.

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