Santa rally continues as European markets rise

Emma Haslett
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Festive cheer has hit the City of London... (Source: Getty)

Is this a Christmas miracle, or merely a sign of a touch of festive merriment among investors? In looks like yesterday's "Santa Rally" will continue into today, as European equities markets rose in morning trading.

The FTSE 100 was up 0.7 per cent in mid-morning trading, while the Dax rose 0.3 per cent and France's Cac 40 rose 0.2 per cent.

They were continuing an example set overnight by Asian markets - the Japanese Nikkei closed 2.4 per cent up, while Hong Kong's Hang Seng rose 1.25 per cent.

A bit of festive cheer among markets isn't unusual, but this year rises have been more welcome than usual, eating into recent losses. Yesterday, shares across Europe made their biggest one-day gain in three years, while the S&P made the biggest two-day jump since the end of 2011.

The Dow also ended the day with a bit of festive sparkle, closing 2.43 per cent up.

But analysts cautioned markets started the month from a low base. Connor Campbell, financials analyst at Spreadex, blamed a range of factors.

If the thought of the Dow Jones not reaching 18000 was laughable a few weeks ago, then the thought of it hitting that peak this week was equally dubious following a dismal run of losses for the US index. Yet a bit of Christmas magic, following the display of faith by the US Fed, the stabilising rouble and Brent Crude, and the Swiss slash in interest rates has led to the Dow nearing its record highs of November and early December. Another rally this afternoon could see the US index pushing its 2014 resistance level.

(Blue is FTSE 100, red is Dax, green is Cac 40)

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