By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- German stocks surged to intraday highs
Tuesday, bolstered as a closely watched survey indicated the mood
in Europe's largest economy appears to have improved.
The lead economic-sentiment indicator from the Centre for
European Economic Research, or ZEW, was 11.5 in November.That
compares with October's dismal reading of negative 3.6, which
marked the first time the survey was in negative territory since
November 2012.
The most recent result was well above expectations of a rise to
0.9, in a Dow Jones survey of economists. The ZEW report follows
data released last week showing Germany narrowly avoided recession
in the third quarter.
"The better-than-expected German ZEW survey may help ease
concern about Europe's locomotive," said currency analysts at Brown
Brothers Harriman in a note Tuesday. The ZEW indicator of current
conditions rose to 3.3 in November, from 3.2 in October. "It does
not sound like much, but the consensus expected another decline,"
said BBH analysts.
Although there were bright spots from the ZEW survey, "we think
that it may be over-optimistic," said Nour Al-Hammoury, chief
market strategist at ADS Securities, in a note. "Economic activity
in Europe is deteriorating due to the global slowing and had not
been helped by the Russian sanctions."
Markets: In Frankfurt, the DAX equity index jumped 1.2% to
9,416.02 after the report, with all 29 of its 30 components trading
higher, led by a 1.5% rise in shares of chemical firm Lanxess AG .
Shares of air carrier Deutsche Lufthansa AG lagged the index,
losing 0.2%.
The advance for the DAX helped the Stoxx Europe 600 extend its
rise to 0.5%, at 3,390.01.
The euro (EURUSD) also climbed to an intraday high at $1.2514
against the dollar following the ZEW data. It has since came off
session highs to buy $1.2516, compared with $1.2450 late Monday.
The shared currency "is likely to remain under pressure as the
European Central Bank is hinting for a full quantitative easing,"
said Al-Hammoury.
Meanwhile, the dollar fell against the pound (GBPUSD) after a
report that inflation in the U.K. accelerated in October to 1.3%,
from 1.2% in September, largely stemming from smaller declines in
prices for fuel and airfares than in the year-ago period.
Economists polled by The Wall Street Journal had expected the rate
to remain at 1.2%.
"The overall [dollar] theme today appears to be one of
consolidation" encouraged by the U.K. inflation and ZEW data, said
BBH analysts led by Marc Chandler.
The pound (GBPUSD) bought $1.5663, up from $1.5650 late
Monday.
The U.K.'s FTSE 100 index rose 0.4% to 6,698.06, and in Paris,
the CAC 40 tacked on 0.7% at 4,257.11.
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