Eurozone stocks surge despite holiday
Stock markets in Dublin and London as well as in Asia and North America were closed yesterday but elsewhere in Europe activity resumed with a bang after the Christmas break.
Eurozone stocks opened 2017 by climbing to their highest in more than a year after data showed manufacturers in the currency bloc ramped up activity at the fastest pace in more than five years.
The Eurozone's blue-chip Euro STOXX 50 index rose half a percent to its highest since December 2015 after the purchasing managers' index (PMI) for factories in the currency bloc came in at 54.9 - well above the 50 mark that separates growth from contraction.
The euro slipped 0.4pc back below $1.05 after climbing to as high as $1.07 during a flash surge in low trading volumes in Asia on Friday.
The dollar gained on bets the US Federal Reserve will hike rates as many as three times this year, and that Donald Trump's administration will stoke growth and inflation with a programme of fiscal expansion. In focus because of its banks, Italy's top share index hit its highest level in 12 months, outperforming other major European stock indexes, with a rally in its banks and a strong manufacturing report improving sentiment.
Italy's FTSE MIB index was up 1.5pc by midday yesterday at its highest level since January 15, 2016. Germany's DAX was up 0.9pc at its highest in nearly 17 months, while France's CAC was up 0.5pc at a 13-month peak.
As European stocks climbed, a rally in risk appetite also pushed down the yields on lower-rated government bonds in the Eurozone to multi-week lows. Italian, Spanish and Portuguese 10-year bond yields were down roughly eight basis points each on the day.