Debt crisis: Policy action hope spurs European shares
EUROPEAN shares rose early on Tuesday as the relief rally sparked by EU leaders' crisis-fighting agreement continued and investors bet on further policy action after weak economic data showed the global economy was in need of further stimulus.
By 0702 GMT, The FTSEurofirst 300 was up 1.94 points, or 0.2 percent at 1037.26 points, adding to a 4.2 percent jump since Friday, when EU leaders revealed an agreement, which, among other measures, allowed the euro zone bailout fund to inject cash into struggling banks.
Weakening manufacturing data in the U.S. on Monday and spiraling unemployment in Europe has also reinforced views that politicians will be forced to act more quickly than previously expected.
"There has been sheer relief that there was some form of compromise from Merkel and that the entire EMU project hadn't fallen apart. Furthermore the weakness of economic data is pointing towards more stimulus from Central Banks with both ECB and BoE expected to be aggressive on Thursday," Marcus Ashworth, head of fixed income at Espirito Santo, said.
While broader shares rallied, the big story continued to be UK-listed lender Barclays, which shed 2.6 percent, as the interest rate-rigging scandal claimed the scalp of its chief executive Bob Diamond.