European stocks are forecast to power on ahead on the open this morning, building on recent gains as positive economic data are for now seen out-weighing fears that the region’s debt crisis could spread.
GFT is quoting the FTSE 100 index to open up 32 points from Friday’s close, at a level of 5,844. The German DAX 40 is expected to open up 25 points at 7,031, and the French CAC 40 index is forecast to open up 15 points at 3,872.
Tax cuts and data lift sentiment
President Obama’s approval of the extension of tax cuts, data fom the UK and Europe showing industrial production and manufacturing expanding at much better than expected rates and US consumer sentiment at 6-month highs are all combining to provide the catalyst for a Christmas rally which only a week or so ago looked all but impossible, as the European crisis took centre stage for nervous markets.
Speculation was rife on Friday that China would raise interest rates at the weekend, following data showing that consumer prices rose 5.1 per cent on the year, the highest in over two years.
Yet with the rate hike largely priced in by markets already, the absence of such a move come this morning could provide an additional boost for equities.
Martin Slaney is director of Global Dealing Operations, GFT