FRANKFURT (MarketWatch) — European markets closed at record highs on Thursday, led by energy and banking stocks, as Wall Street looked set to extend a historical winning streak after first-time claims for U.S. jobless benefits unexpectedly fell.
The Stoxx 600 Europe Index /zigman2/quotes/210599654/delayed XX:SXXP +0.46% closed up 1% to rose 0.8% to 298.52, its highest level since June 3, 2008, nearing on 5 year highs.
A combination of strong economic indicators from the jobs and the retail market are “giving the bulls something to really cheer about,” said Ishaq Siddiqi, market strategist at ETX Capital.
“In the case of the Dow, it’s in [uncharted] territory, making history as we speak while the S&P500 is a whisker away from its all-time high. The carry-on momentum is being felt in Europe, propelling the Stoxx 600 to precrisis levels despite the lingering worries over Italy’s political situation,” said Siddiqi in emailed comments.
Banks and financials led the way higher, with insurer Prudential PLC /zigman2/quotes/200530572/delayed UK:PRU +0.45% rising 2.7% to add to the previous day’s strong gain on the back of earnings results, while index heavyweight HSBC Holdings PLC /zigman2/quotes/203901799/delayed UK:HSBA +0.01% /zigman2/quotes/202687335/delayed HK:5 0.00% advanced 1.8%.
The number of people applying for first-time U.S. jobless benefits fell by 10,000 to 332,000 in the week ended March 9—the second-lowest level in five years. Economists surveyed by MarketWatch had forecast a rise to 350,000.
Separately, data showed the Producer Price Index rose 0.7% in February, matching expectations. The Standard & Poor’s 500 index /zigman2/quotes/210599714/realtime SPX -0.11% /zigman2/quotes/210599714/realtime SPX -0.11% was just a few points from its record close set back in October 2007 as stocks climbed on that upbeat data.
Closer to home for European investors, European Union leaders began their summit meeting in Brussels. Euro-zone finance ministers are scheduled to meet Friday to further discuss a bailout for Cyprus.
“I think a bailout program is fully priced into the markets at the moment but I think investors will be looking for some reassurance on the matter, given Greece’s exposure to the country and the potential for a run on the banks in Cyprus if lenders attempt to force losses on depositors,” said Craig Erlam, market analyst at Alpari in London.
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Peripheral markets were among the day’s best performers.
Italy’s FTSE MIB stock index bucked recent weakness to rise 2.4%, with shares of Assicurazioni Generali SpA /zigman2/quotes/203793198/delayed IT:G +0.22% surging over 9%, the day’s biggest gainer for the Stoxx 600.
Generali climbed after reporting that net profit for the year dropped by around 89%, with the results reflecting large fourth-quarter impairments as new Chief Executive Mario Greco moved to clean up the company’s balance sheet.
“We are simplifying our structure and adopting a more disciplined approach to managing the Group and its investments, as we refocus on our insurance business,” Greco said in a statement.
BNP Paribas SA /zigman2/quotes/206351084/delayed FR:BNP +0.21% rose 1.2%, while France’s CAC 40 stock index /zigman2/quotes/210597958/delayed FR:PX1 +0.71% added nearly 1% to 3,871.58. France Telecom SA surged over 7%. A day earlier, the telecom announced a deal to build a €1 billion fiber optic network in Spain, to take on Telefonica SA /zigman2/quotes/200416613/delayed ES:TEF -0.50% /zigman2/quotes/207034643/composite TEF -0.90% in high-speed broadband. Telefónica shares rose 4%.
Germany’s DAX stock index /zigman2/quotes/210597999/delayed DX:DAX +0.46% advanced 1% to 8,058.37. Shares of HeidelbergCement AG /zigman2/quotes/202418791/delayed DE:HEI +0.19% rose over 3% after the company said it was aiming for higher revenue and operating income this year, boosted by demand in Asia, Africa and the U.S.
Among others, chemical group BASF SE /zigman2/quotes/204280060/delayed DE:BAS +0.29% rose 2.4%.
Shares of steelmaker ArcelorMittal /zigman2/quotes/209487033/delayed NL:MT +0.67% FR:MT 0.00% /zigman2/quotes/202790215/composite MT +0.57% rose 2.6% in Amsterdam after analysts at Citibank upgraded its stock to buy from neutral.
“We believe there is now an opportunity to buy into the first potential steps towards a strategic overhaul for the company — dealing with the languishing European business,” the analysts said in a research note.
“Ultimately we would favor a separation of the European assets from the rest of the group, to aid consolidation in the region and give investors exposure to the stronger businesses in the company,” they said.
London’s FTSE 100 stock index /zigman2/quotes/210598409/delayed UK:UKX +0.20% rose 0.7% to 6,529.41, levels it hasn’t seen since early 2008.
Other heavyweight gainers in London included telecom firm Vodafone Group PLC /zigman2/quotes/202484985/delayed UK:VOD -0.05% , which added 1.3%, while Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC +1.00% gained 1% and grocer Tesco PLC /zigman2/quotes/203761082/delayed UK:TSCO +0.02% advanced 2.8%.