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Stocks eye New Year despite Santa rally

Wednesday, December 24, 2014 - 01:45

European stock markets celebrate their last trading day before Christmas with strong gains, buoyed by surprisingly robust US GDP data. Can the good times last? Joel Flynn reports.

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Still room for food at the eleventh hour in Berlin. A goose or two one of the last presents to be wrapped here before Christmas. As far as European stocks are concerned though the buying's all but done. The so-called Santa rally in markets boosted by holiday cheer from the U.S. - stellar GDP growth of 5 percent driving the Dow and the S&P indexes to record closing highs. But a little more recalcitrance in Europe, says IG's Alastair McCaig. SOUNDBITE: IG Market Analyst, Alastair McCaig, saying (English): "Europe has been dragged along a little more reluctantly, I guess the likes of the FTSE, we've got a little more weighting when it comes to the oil and gas and commodity stocks anyway, which makes us a little bit more of an issue to join in on this enthusiasm and it looks highly unlikely we're going to end the month out positive, but there's still a bit more trading to be done next week, certainly." The plunge this year in oil prices has confused the picture for many traders. Russia in particular hit hard - Western sanctions reinforcing Russia's economic woes. Appetite for risk not all sated though - equities still the primary home for investor cash. Markets now eyeing quantitative easing and other new year plans from central banks. SOUNDBITE: IG Market Analyst, Alastair McCaig, saying (English): "We've been talking about interest rate decisions all year. I think the UK seems pretty unlikely we're going to see something materialise any time soon. The U.S. though, the issues that are affecting the euro zone and Europe and the UK, not really translating across the Atlantic to them, they seem to be keeping apace, and I guess there's a fear there's going to be a divergence between the two economic regions as they move further afield and the euro zone pulls us back." Greece among the other risks in Europe - a general election there on the horizon. The region's economies still struggling against the spectre of deflation and weak growth. For now though focus still on festive cheer.

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Stocks eye New Year despite Santa rally

Wednesday, December 24, 2014 - 01:45