EUROPEAN shares rose on Monday as estimate-beating economic data in southern Europe and some merger & acquisition activity encouraged fund managers to build up their holdings on the first day of the third quarter.
Spain's IBEX and Italy's FTSE MIB, up 1.8pc and 1.5pc respectively, were the best performers among national indexes as better-than-expected manufacturing data gave a boost to two of the region's year-to-date laggards.
The broader FTSEurofirst 300 rose 0.9pc to 1,162.28 points at the provisional close. The index has risen on the first day of each of the last seven quarters as central bank action to support the economy and stabilise markets fuelled a rally in stocks.
Alan Higgins, chief investment officer for Coutts UK, said he had been increasing his equity holdings in recent weeks and had begun to take on stocks more reliant on economic growth.
"One thing we've had on for many years now is an income and quality bias," he said, referring to the market's consensus preference for high dividend yields and earnings security during the height of the financial crisis.
"We're slowly changing that. So we're looking to buy financials and materials," he added.
Travel and leisure, financial services and basic resources stocks were the best sectoral performers on Monday, up between 1.9pc and 2.6pc.
Nokia rose 3.7pc in brisk volume as the handset maker agreed to buy Siemens's stake in their networks joint venture for €1.7bn, a valuation that analysts deemed attractive.