Europe Roundup: Mood brightens

PARIS: European stocks rallied yesterday as investors applauded a debt deal to avoid a US default, but gains were capped as a number of market players doubted it would help the world's biggest economy avoid a credit downgrade.

HSBC was the top gainer among European blue chips, surging 4.8 per cent after posting a surprise rise in first-half profit.

At 1115 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 per cent at 1,090.42 after losing 2.4 per cent last week, while the eurozone's blue-chip Euro STOXX 50 index was up 0.7 per cent at 2,688.18.

London's benchmark FTSE 100 index soared 1.46 per cent to 5,900.09 in early afternoon trade, while Frankfurt's DAX 30 grew 0.68 per cent to 7,207.44 and in Paris the CAC 40 gained 0.80 per cent to 3,700.66.

"The deal is good news for the global economy. It removes a risk that had started to weigh heavily on market sentiment," said analyst Holger Schmiedling at German investment bank Berenberg. - Agencies