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European shares boosted by economic reports
by Chris Marshall on Aug 13, 2013 at 10:21
A report showing that German investor morale is brightening helped European stock markets rise on Tuesday, with the euro also creeping up as data continues to show that the currency bloc is slowly recovering.
Britain's FTSE 100 climbed 0.6% to 6,618, in line with gains on the pan-European Eurofirst 300, which was also trading up 0.6% at 1,237.
The move higher came amid several updates on the state of the eurozone economy, with the ZEW gauge of German economic morale rising to 42 in August, up from 36.3 the previous month.
Eurozone industrial production, meanwhile, rose 0.7% in June after contracting 0.2% in May. The figure was slightly below expectations, but still provides support for a return to overall growth in the eurozone, with a first reading of second quarter economic growth tomorrow expected to show an end to the currency bloc’s recession.
The euro was marginally higher after the data, up 0.08% to $1.3308.
The British pound reversed a small earlier decline, to rise 0.07% to $1.5476, as UK consumer prices inflation fell to 2.8% in July. Now that Bank of England governor Mark Carney has announced plans to tie policy to the unemployment rate, markets are expected to react more strongly to jobs data – with an update due tomorrow – than the inflation reading.
Separate data today added to enthusiasm about a resurgent UK housing market. The Office for National Statistics reported a 0.4% rise in house prices in June, meaning a 3.1% annual gain. An update from the Royal Institution for Chartered Surveyors showed that house prices have been rising at their fastest rate since the 2006 peak.
Of standout shares in London, Resolution (RSL.L), the insurance consolidation group, moved 4.4% higher to 228p after reporting a 17% rise in pre-tax profits in the first half of the year, beating analyst expectations.
‘The company has delivered another set of results without any adverse surprises and we expect these results to be taken well. Buy,’ concluded Bank of America Merrill Lynch analyst Blair Stewart.
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