LONDON, Oct 11: European stocks stormed back on Friday as Wall Street headed towards a second day of strong gains, helped by encouraging results from US giant General Electric.
Across the 12-nation euro zone, the Euro Stoxx 50 index of leading European shares surged 4.64 per cent to 2,338.2 points in late trades.
The British FTSE 100 index climbed 4.66 per cent to 3,953.4 points, the German DAX 30 index rose 4.67 per cent to 2,860.76 points in late trades and the French CAC 40 index added 5.21 per cent to 2,902.27 points.
As most European stock markets closed, the Dow Jones Industrials Average had gained 3.19 per cent in New York, and the tech-rich Nasdaq was up 3.16 per cent.
Analysts warned however that the stock market gains were part of the ongoing volatility rather than a change in the underlying mood.
“We’re enjoying a little bit of a bear squeeze or a dead cat bounce at the moment,” NatWest head of research Jeremy Batstone said early in the day.
“Very bad news is already priced in so a rebound from the oversold levels we have seen is inevitable,” he told AFP.
A Paris dealer said later: “The market wanted to climb today and it climbed”.
“There are no obvious reasons however, neither for its drop of 25 per cent in a month, nor for its jump of almost 10 per cent in two days. It has become a casino.
“It is pretty strange, but no one is able to predict what the market will do during the next session,” he commented.
In London, British media groups Carlton and Granada unveiled plans for a merger of the country’s two dominant commercial broadcasters, which have been hit hard by the downturn in global advertising spending.
The pair said they were in advanced discussions over a tie-up that would see Granada shareholders receive 68 per cent of the equity of the new group and 200 million pounds (317 million euros, $312 million) of cash.
By Friday’s close, Granada’s share price was up 8.3 per cent at 72.75 pence and Carlton shares were 13.7 per cent higher at 128.5 pence.
The two broadcasters, which together form the backbone of Britain’s Independent Television Network (ITV), Britain’s leading commercial broadcaster, held discussions about a full merger earlier this year, but the talks were halted partly owing to concern any deal would be blocked by British competition regulators.
Elsewhere, financial stocks continued to bounce back from recent losses, with French insurance groups AXA and AGF up 10.05 per cent at 12.05 euros and 10.19 per cent at 28.22 euros, respectively.
Dexia bank gained 10.59 per cent to 9.92 euros, and Societe Generale gained 10.02 per cent to 45.77 euros.
In London, insurance company Aviva was up 7.32 per cent to 440 pence, and Prudential gained 11.4 per cent to 425.
In late Frankfurt trades, Commerzbank gained another 8.26 per cent to 7.34 euros, and HypoVerinsbank was up 7.36 per cent to 14.74 euros.
The biggest German distributor, Metro, soared 14.73 per cent to 19 euros after declaring earlier Friday it was “very happy with its third quarter”.
British supermarket chain Sainsbury gained 11.5 per cent to 282 pence, while number one Tesco advanced 6.56 per cent to 207 pence.
German airline Lufthansa gained 12.44 per cent to 9.85 euros in late trades after its financial director was quoted as saying the carrier’s full-year operating profit forecast is “perhaps very conservative”.
In Milan, Fiat Auto shares surged 9.03 per cent to 8.98 euros on what one dealer said was a technical rebound following a loss of more than 12 per cent since Tuesday.
The troubled group announced on Wednesday that it would shed, at least temporarily, some 8,100 posts, or 21 per cent of its workforce.
In Amsterdam, the AEX index jumped 5.40 per cent to 317.75 points, the Swiss SMI gained 5.21 per cent to 4,769.5 points, in Miland the Mib 30 was up 3.18 per cent at 22,201 points, in Madrid the Ibex 35 advanced 3.92 per cent to 5,661 points.—AFP