European shares head higher

Published December 21, 2006

LONDON, Dec 20: Europe's main stock markets climbed on Wednesday after Wall Street enjoyed further record gains overnight. London's FTSE 100 index of leading shares won 0.39 per cent to 6,227.80 points, in Frankfurt the DAX 30 added 0.65 per cent to reach 6,595.84 points and the Paris CAC 40 rose 0.71 per cent to 5,523.83.

The DJ Euro Stoxx 50 index of eurozone blue chip shares increased 0.60 per cent to 4,124.95 points.

The euro stood at 1.3223 dollars. US shares ended mixed on Tuesday as the market digested a sharp spike in wholesale price inflation -- but strong momentum lifted the Dow blue-chip index to a fresh all-time record close.

The positive sentiment spilled over into Asia on Wednesday, with Japanese share prices cracking the 17,000-point level for the first time in more than seven months also on fading fears of an interest rate hike, dealers said.

In London, the mining sector rebounded from recent losses that were sparked by worries over soft Asian demand for commodities.

Kazakhmys jumped 1.24 per cent to 1,152 pence, Xstrata won 64 per cent to 2,522 pence and Vedanta Resources rose 0.83 per cent in value to 1,209 pence.

The aerospace sector was also in focus after Singapore Airlines said it would buy nine more double-decker A380 aircraft from European aircraft maker Airbus.

In Paris trading, the share price of Airbus parent group EADS gained 0.49 per cent to 24.37 euros.

In US deals on Tuesday, the Dow Jones Industrial Average closed up 0.24 per cent at 12,471.32 points, breaking the record high set last Friday.

The tech-heavy Nasdaq composite index lost 0.25 per cent to 2,429.55 while the Standard and Poor's 500 broad-market index increased 0.22 per cent to 1,425.55 points.

Earlier losses were somewhat offset by a report which showed that US housing starts rose by more than expected last month to a seasonally adjusted rate of 1.588 million units after falling strongly in October.

Thai stocks on Tuesday had suffered the biggest losses in more than 30 years as panicking investors fled the market after the central bank imposed draconian measures in an effort to halt the rise of Thailand's baht currency.—AFP

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