Europe close Market Report: Markets hit 2-week highs

Date: Thursday 03 Jun 2010

Bourses ended Thursday’s session with chunky gains despite giving up ground near the close as Wall Street flirted with negative territory.

Stocks fed off last night’s strong close in the US where the Dow Jones added over 200 points, followed up by strength in the Far East, as investors regained confidence in the economic recovery.

They jumped in to auto plays, revving up French carmakers Peugeot and Renault, and their German peers Daimler andBMW.

Frankfurt rose 73 points to 6,054, its highest since 19 May, but it had been up 120 mid-morning. Paris watched a 97-point lead turn into a gain of 55 to finish at 3,557, while Zurich saw triple-digit gains halved to 50 points.

Carrier Air France-KLM gained after reporting a 1.6% rise in passengers in May.

BP has agreed to fund the six sections of the Louisiana barrier islands proposal, which is estimated to cost the oil explorer $360m.

The group will not manage or contract directly for the construction of the island sections and said it will not assume any liability for unintended consequences of the project.

Elsewhere, the European Commission proposed to set up a new regulatory body to monitor credit rating agencies. Under the proposal, a new EU authority, the European Securities and Markets Authority (ESMA), will be given powers to investigate, hand out fines and revoke licences.

The move is part of the European Union’s effort to tighten supervision of the region’s financial services industry. Rating agencies have recently been in the firing line for allegedly fuelling Greece’s problems when they downgraded the Mediterranean country’s debt.

Michel Barnier, the French financial services commissioner, said: “The changes to rules on credit rating agencies will mean better supervision and increased transparency in this crucial sector. “But they are only a first step. We are looking at this market in more detail,” he added.

On the economic front, eurozone retail sales volumes dropped by 1.2% month-on-month in April and by 1.5% year-on-year.