Europe stocks follow Wall St higher
Published 12/08/2011 | 07:52
Stocks in Europe have ended sharply higher after positive retail sales data from the US helped ease concerns that the world's largest economy is heading back into recession.
A ban on short-selling in several eurozone countries lifted bank shares, while Wall Street also rose, gearing up for the first two straight days of gains in more than a month.
Gains on both sides of the Atlantic followed one of the most volatile weeks in years, as investor sentiment oscillated wildly.
At times, investors cheered anti-crisis measures, such as the European Central Bank's decision to support the bonds of Italy and Spain; at others their mood soured amid concerns over the state of the global economy and the exposure of banks to the debt of countries like Greece.
However, as the week progressed, the mood seemed to have calmed somewhat.
In Europe, London's FTSE 100 jumped 3% to 5,320.0, while Germany's DAX was 3.5% higher at 5,997.7. The CAC-40 in France gained 4% to 3,213.8, even after data showed the French economy did not grow in the second quarter.
In the US, The Dow Jones Industrial Average increased 1.6% to 11,318, while the broader Standard & Poor's 500 index was up 0.5% at 1,186.
Sentiment has been lifted after the US Commerce Department said that retail sales rose 0.5% last month, the best showing since a 0.8% advance in March.
"July retail sales were remarkably buoyant across the board, which speaks volumes for the US consumer's ability to remain resilient in the face of dysfunctional politics in Washington, market disruptions on Wall Street and economic challenges on Main Street," said Michael Woolfolk, managing director at BNY Mellon.
The figures come just a week after the downgrade of the US's credit rating, which contributed to this week's market turmoil.