By Carla Mozee, MarketWatch
Eurozone manufacturing, services activity expands
LONDON (MarketWatch) -- European stocks charged higher Tuesday,
flirting with their highest close on record, as investors reacted
to mergers-and-acquisition developments and economic data pointing
to improvements in the economy, and as concerns eased about an
interest-rate increase in the U.S.
The Stoxx Europe 600 climbed 1.6% to 404.34, getting nearer to
its best closing level of 405.50.
Tuesday's broad-based gain was led by a more than 4% surge in
oil and gas stocks as they caught up with a more than 6% rally in
oil prices
(http://www.marketwatch.com/story/oil-rebounds-as-iran-exports-seen-taking-months-to-ramp-up-2015-04-06)(CLK5)
on Monday. That move came in part from fading concerns that a
preliminary deal on Iran's nuclear program would lead Iranian oil
flooding onto world markets. Oil prices on Tuesday turned
higher.
The U.K.'s FTSE 100
(http://www.marketwatch.com/story/ftse-100-jumps-after-holiday-break-but-easyjet-iag-lag-2015-04-07),
which is heavily weighted by oil stocks, rose by the most in two
months, gaining 1.9% to 6,961.77. Meanwhile, Germany's DAX 30 rose
1.3% to 12,123.52.
Read: Oil prices to stay lower for longer, says Goldman Sachs
(http://www.marketwatch.com/story/oil-prices-to-stay-lower-for-longer-says-goldman-sachs-2015-04-07)
Deal talk: TNT Express NV was in the spotlight Tuesday, with
shares rising 28% as the Dutch logistics group agreed to be
purchased
(http://www.marketwatch.com/story/fedex-to-buy-tnt-express-for-48-billion-in-cash-2015-04-07)
by FedEx Corp. (FDX) for about EUR4.4 billion ($4.8 billion) in
cash, a move that will allow parcel delivery company FedEx to
expand operations in Europe.
France's CAC 40 gained 1.5% to 5,151.19. In Paris, Vivendi SA
shares climbed 1.2% as the media conglomerate confirmed it wants to
buy Dailymotion
(http://www.marketwatch.com/story/vivendi-confirms-interest-in-buying-oranges-dailymotion-2015-04-07),
a video-streaming website run by French telecom Orange SA . Orange
shares were up 1%.
European investors returned from the Easter holiday break to an
overnight jump in U.S. stocks
(http://www.marketwatch.com/story/us-stocks-futures-tumble-after-jobs-data-triggers-corporate-profit-worries-2015-04-06)(SPX)
(DJI), helped by expectations the Federal Reserve will move more
slowly in raising interest rates after a disappointing March jobs
report. U.S. equity trading was closed Friday when the report was
released. U.S. stocks (SPX) (DJI) were trading higher Tuesday.
New York Federal Reserve President William Dudley
(http://www.marketwatch.com/story/feds-dudley-signals-go-slow-approach-to-rate-hike-2015-04-06)
on Monday suggested the Fed won't raise interest rates at least
until September. "A few more speeches in a similar tone by some
other officials could further fuel up this speculative behavior,"
Naeem Aslam, chief market analyst at AvaTrade, said in an early
Tuesday note, adding that the market may then "see some new capital
commitment by investors."
European stocks also found support Tuesday after data firm
Markit said that activity in the manufacturing and services sectors
in the eurozone expanded by the fastest rate in nearly a year
(http://www.marketwatch.com/story/eurozone-economy-grows-at-fastest-in-11-months-2015-04-07).
Its composite purchasing managers index rose to 54.0 in March, up
from 53.3 in February. Markit's initial estimate had the PMI rising
to 54.1.
Spending power in households has been aided by cheaper oil
prices, while "aggressive" easing measures enacted by the European
Central Bank "has cut borrowing costs materially," wrote Berenberg
senior economist Christian Schulz in a note. He also noted that
more export-oriented sectors have benefited from a weaker euro.
"As the full effect of the new economic tailwinds is only
beginning to unfold, further gains in momentum are likely," Schulz
said. "The eurozone is headed for very solid GDP growth in the
second half of the year, with some upside risk to our call for 1.4%
GDP growth for the full year 2015."
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