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

by **hlk** Mon 20 May 2013, 19:53

Business & Markets 2013
Written by Reuters
Monday, 20 May 2013 19:38
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LONDON (May 20): 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." -- Reuters