Europe Shares Led Up by Miners on China Policy Move

Bond

European shares hit a near seven-month high on Monday after China eased its monetary policy further over the weekend in an effort to fight slowing growth, with mining stocks among the main winners.

Major European Indexes

GB;FTSE

5947.12

42.05

+0.71%

163,644,733

CAC40-FR

3466.78

27.16

+0.79%

40,325,721

DAX-XE

6912.04

64.01

+0.93%

34,955,637

European mining shares [.SXPP  518.49    10.00  (+1.97%)   ] rose 1.3 percent after China's central bank cut on Saturday the amount of cash banks must hold in reserves.

China is the world's biggest metals consumer.

 

At 0814 GMT, the FTSEurofirst 300 [.FTEU3  1090.36    7.14  (+0.66%)   ] index of top European shares was up 0.6 percent at 1,090.01 points, the highest since early August.

 

Expectations Greece would finally see a second bailout package approved by euro zone finance ministers also contributed to the more bullish sentiment, although much has already been priced in, an analyst said.

 

"If this doesn't happen, you will get a major shock and might see a correction of as much as 10 percent. At the end of the day, it will be growth that will decide whether Greece is going to be saved or not," said Koen De Leus, strategist at KBC Securities.

"If you want to buy equities now, buy defensives such as telecoms and healthcare. Focus on companies with high dividend yields. If cyclicals fall about 10 percent from here, than that could be a good entry point."

 

Copyright 2012 Thomson Reuters. Click for restrictions.

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