Europe's stock markets start year leaping to new multi-year highs

[Strengthandhonour]

Europe's stock markets start year leaping to new multi-year highs

RITISH and continential European stock markets broke fast out of the traps for 2007 yesterday, hitting new multi-year peaks.

In London the FTSE index of Britain's biggest 100 companies surged 90.1 points, or 1.5 per cent, to 6,310.9, while the FTSEurofirst 300 index climbed 1 per cent to 1,499 points - its highest level since February 2001.

On the first day of trading of the year, the MSCI All-Country World Index rose 0.7 per cent to a new all-time peak of 370.4 points as markets in Hong Kong and Australia hit record highs.

Analysts said a clearer picture would emerge today when Wall Street reopens after being closed yesterday as part of a day of mourning in the US for former president Gerald Ford.

Tokyo also reopens today after being closed yesterday.

The Footsie hit its highest level in almost six years as trading resumed, following a near-11 per cent gain in 2006.

The index, launched in 1984, hit its all-time high of 6,950 in December 1999.

Paul Webb, trader at CMC Markets, said: "Equity markets have got the year off to a bullish start, with mining stocks helping the FTSE test another almost-six-year high.

"However, with Wall Street closed again, there has been little direction from across the Atlantic, so this could see the mood change significantly later."

Ian Scott, a strategist at Lehman Brothers, said: "We think European equity markets will rise again over the course of 2007. Our forecast suggests a total return of 14 per cent."

Scott said he foresaw "headwinds of declining earnings growth" by companies, but still believed favourable valuations of equities would provide scope for further outperformance.

Manufacturing data from the eurozone showed growth remained strong, but off its mid-year peak.

The RBS/NTC Eurozone Purchasing Managers' Index slipped to a nine-month low of 56.5 in December.

But the average reading for 2006 of 56.3 was more than five points higher than the average 2005 reading and well above the 50 level that separates growth from contraction.

source: Scotsman.com Business - Europe\'s stock markets start year leaping to new multi-year highs