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Encouraging signs for global economy push European shares to new 5-year high
May 20, 2013 / 8:45 AM / 5 years ago

Encouraging signs for global economy push European shares to new 5-year high

* FTSEurofirst 300 index rises 0.1 percent
    * Auto, travel shares help index to set 5-yr high
    * Ryanair jumps after forecast-beating results

    By Atul Prakash
    LONDON, May 20 (Reuters) - European shares set a new
five-year high for a fourth straight session on Monday after
positive indicators from the United States and Japan pointed to
an improving global economic outlook.
    At 0803 GMT, the FTSEurofirst 300 index of blue
chip European shares was 0.1 percent firmer at 1,249.08 points
after earlier reaching 1,250.91, its highest since the middle of
2008. The index is up more than 10 percent this year.
    "We have started to see a series of positive readings coming
out of the United States. We are positioned for a rising market
and think that the best way is to invest in financials," Robert
Parkes, equity strategist at HSBC Securities, said.
    Equities gained strength from encouraging economic
indicators. Data on Friday showed that U.S. consumer sentiment
rose to the highest level in nearly six years, while a gauge of
future economic activity rose to a near five-year high.
    On Monday, Japan raised its assessment of the country's
economy for the first time in two months. 
    Cyclical sectors were in demand, with the travel and leisure
sector gaining 0.6 percent.
    Budget airline Ryanair led the sector, jumping 5.7
percent after posting forecast-beating full-year earnings on
strong growth in fares and a sharp rise in charges for items
such as baggage and in-flight refreshments. 
    The news supported peer EasyJet, which climbed 4.3
percent. It was underpinned by Citigroup lifting its price
target for the stock to 1,330 pence from 1,210 pence. The shares
were last quoted at 1,240 pence.
    The European auto sector rose 1.3 percent on
expectations that a recovery in the global economy would boost
demand for vehicles.
    "You might gradually see people moving away from defensives
to cyclicals," a European equities trader said. "It's incredibly
difficult to find good returns in the bond market, so equities
are an obvious choice for investors."

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