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European Stocks Extend Rally

July 30, 2002|From Reuters

European stocks posted their biggest one-day percentage gain in at least 15 years Monday as investors extended the rally that began late last week and plowed money back into equities.

"There's a feeling that maybe we're building a bottom," said David Thwaites, a European equities strategist at BNP Paribas.

The FTSE Eurotop 300 index rose 5.9%--beating its previous record one-day percentage gain of 5.8% set in October 1987. That reflected gains in markets across the Continent: The main German share index soared 7.9% while France's CAC-40 index jumped 7.0% and the Italian MIB-30 index rose 4.6%. In London, the FTSE-100 index jumped 4.6%.

European markets, taking their lead from Wall Street, had plunged sharply in recent weeks as accounting worries, profit concerns and deteriorating investor sentiment combined to knock down stock prices. But a feeling that stocks have been beaten down to bargain levels began to take hold on both sides of the Atlantic last week, and European markets were off and running Monday before the rally got underway in New York.

However, analysts said the news from Europe's corporate community was still not completely positive. " ... there's not much confidence about the outlook [for corporate earnings]," said Thwaites. Big oil companies BP and Repsol, Italy's No.2 bank Sanpaolo IMI, and Europe's biggest car maker Volkswagen are among the firms reporting today.

Insurers dominated the blue chip leader board as the sector, which has been battered by worries over its solvency, rode the market bounce. Auto makers and media companies also were up strongly. Volkswagen gained 9.6% and BMW rose 8.7%, while French advertising group Havas surged 7.8%.

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