Share

European shares return near multi-year highs

London - European shares rose back to near multi-year highs on Tuesday after a European Central Bank (ECB) policymaker said the ECB would front-load an asset purchase scheme, aimed at boosting growth in the region.

The comments led the euro to trade below $1.12 for the first time in a week, juicing investor appetite for stocks - especially in the exporter-heavy German DAX index. Euro weakness in the first three months of the year added €17bn to German blue-chip company revenues, according to EY.

Athens' stock market, which has consistently underperformed this year due to worries over Greece's debt situation, also rose after the Greek labour minister said Athens would soon conclude a deal with foreign creditors that could unlock more loans to the cash-starved country.

The pan-European FTSEurofirst 300 index was up 1.3% at 11:27, though it pulled back from session highs after a survey showed German investor morale fell by more than expected in May.

The FTSEurofirst has now recovered its losses since the start of the month, with some investors saying the past few weeks' volatility linked to the roller coaster sell-off in the bond market had not altered their positive stance on equities.

"I still think that bonds are risky and that equities remain the asset of choice," said Francois Savary, chief strategist at Swiss bank Reyl.

Some fund managers warned however that European equities were by no means cheap and that it was time to trim exposure to blue-chip, dividend-paying quality companies in the current environment.

"I have tactically cut back on financials because of the growing risk around Greece and have increased my exposure to real estate," said Michele Patri, portfolio manager at AllianceBernstein.

"I am not any more in ultra-high-quality names. I don't think the market valuation is cheap."

Among big movers, media group Reed Elsevier rose by 3% after Goldman Sachs raised its rating on the stock to "buy" from "neutral".

However, Vodafone fell 2.6% as some traders said the mobile network operator's guidance had been slightly below forecasts, even though Vodafone returned to quarterly sales growth.

According to data from Thomson Reuters StarMine, 61% of the companies on the pan-European STOXX 600 index have beaten or met market expectations with their first quarter results, while 39% have missed expectations.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders