5 Mar 2009

European shares lift

7:50 am on 5 March 2009

European shares advanced on Wednesday on signs of an economic recovery in China.

The government is to increase spending in areas such as infrastructure and manufacturing on top of a 4 trillion yuan ($US584.7 billion) stimulus package announced in November.

The FTSEurofirst 300 index of top European shares closed 4.2% higher at 696.23 points, after losses in the three previous sessions.

The resources sector index rose 12.6%: Rio Tinto was up 14% and BHP Billiton was up 12.9%, after the price of copper rose by almost 7% - its highest in more than three months. ArcelorMittal gained 12.4%.

Crude oil prices rose 6%: Total was up 8.9% and Royal Dutch Shell was up 6.3%

In Frankfurt, the DAX index ended at 3,890.94 points, up 200.22 or 5.42%. In Paris, the CAC-40 index closed at 2,675.68 points, up 121.13 or 4.74%. The Swiss market index closed at 4,463.67 points, up 105.67 or 2.42%.

In Britain, the FTSE 100 closed 133.78 points, 3.81%, at 3,645.87, after losing more than 10 % in the previous three sessions.

Other markets

In Tokyo, the Nikkei gained 61.24 points, 0.85%, in moderate trade to end at 7,290.96.

Shares in Hong Kong rose by 2.47% after Beijing said it would expand its fiscal spending plan. The Hang Seng Index gained 297.27 points to close at 12,331.15.

In Australia, stocks fell after a surprise decline in fourth-quarter gross domestic product. The S&P/ASX 200 index lost 52.8 points, 1.64%, to end at 3,166.4.

The All Ordinaries shed 45.5 points, or 1.43%, to 3125.9.

In New Zealand, the NZX50 index closed up 51 points, or 2.1%, at 2469. Market turnover was $59 million.

Contact Energy rose 2 cents to $5.51, Fletcher Building was up 11c at $5.26 and Telecom gained 12c to $2.38.