PEAN shares surged yesterday in a broad-based rally after Chinese and European factory data showed the global economic recovery is on track.
A batch of upbeat notes from top investment banks, including a UBS upgrade on continental European equities to “overweight” from “neutral”, also lifted the market mood.
The FTSEurofirst 300 index of top European shares gained 1.8 per cent to 1,217.01 points, its biggest one-day rise in nearly two months. The Eurozone’s blue-chip Euro STOXX 50 index added 1.9 per cent to 2,774.09 points.
Trading volumes were relatively low in the absence of US investors due to a public holiday.
Mining shares featured among the top gainers, with Rio Tinto rising 4.2 per cent and Anglo American up 3.9 per cent after China’s factory activity expanded at the fastest pace in more than a year last month, with a jump in new orders.
Bullish data also came from Europe, with British manufacturing accelerating again in August while Eurozone factory activity expanded at its fastest pace in over two years.
“Things are finally moving in Europe. Even though economic growth is partially driven by rising public spending, it’s creating the conditions for a pickup in corporate investment,” said Patrick Legland, head of research at Societe Generale.
Recent data from Societe Generale showed that it would still take $100bn of net inflows into European equities to make up for the sharp outflows seen since 2007.
Around Europe Germany’s DAX index rose 1.7 per cent, and France’s CAC 40 added 1.8 per cent.