By Sara Sjolin, MarketWatch
European stock markets posted broad-based gains on Thursday, joining a global rally that has taken Japan’s benchmark index to a 26-year high and sent all three major U.S. indexes to fresh records.
Major energy companies helped to propel equity markets higher in Europe as oil prices hit a three-year high, while car maker shares jumped after better-than-expected U.S. auto sales data.
What are markets doing: The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.65% gained 0.9% to end at 393.68, closing at its highest close since Nov. 8, when the pan-European index ended at 394.45, according to FactSet.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0083% rose to $1.2066, up from $1.2014 late Wednesday in New York.
What is driving the market: European investors took a lead from Asia and the U.S. In Asia, Japan’s Nikkei 225 index /zigman2/quotes/210597971/delayed JP:NIK -2.03% jumped 3.3% for its highest close since January 1992, on its first trading day of the year.
And in the U.S. the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.93% breezed past the 25,000 milestone for the first time ever while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.93% and Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.19% also traded in record territory. The gains in the U.S. came after a stronger-than-expected report on private-sector hiring.
Car makers were among biggest advancers in Europe on Thursday, after U.S. car sales data out on Wednesday beat forecasts. The Stoxx Europe 600 automobiles and parts index /zigman2/quotes/210599241/delayed XX:SXAP -0.28% rose 1.8%, closing at its highest level since June 2015.
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Oil companies were also charging higher as crude prices rose to three-year highs as antigovernment protests continued in Iran . There are fears that the riots, which have left more than 20 people dead, may lead to disruption to crude output from OPEC’s third-largest producer, which would limit global oil supply and support prices. The Stoxx Europe 600 oil & gas index /zigman2/quotes/210599627/delayed XX:SXEP +0.81% added 1.2%.
What are strategists saying: “Ding ding ding! After stalling in the second half of December the Dow Jones has rediscovered its mojo, crossing the 25,000(!!!) mark for the first time in its history off the back of some supercharged jobs figures,” said Connor Campbell, financial analyst at Spreadex, in a note.
“This latest U.S. record inspired the European indices to expand their own growth. Despite the euro rising against both the dollar and the pound the DAX and CAC were electric,” he added.
Stock movers: Among car makers, Fiat Chrysler Automobiles NV jumped 8.4% for a record closing high. Renault /zigman2/quotes/200364537/composite FR +0.44% gained 1.3%, and Daimler AG /zigman2/quotes/205332368/delayed DE:DAI -0.20% climbed 1.2%.
In the energy sector, shares of BP PLC /zigman2/quotes/207305210/composite BP +0.73% and Royal Dutch Shell /zigman2/quotes/204253697/delayed UK:RDSB +1.21% /zigman2/quotes/207682964/composite RDS.B +1.05% each added 1.1%, Tullow Oil /zigman2/quotes/205079109/delayed UK:TLW +0.99% climbed 2.1%, and Total SA /zigman2/quotes/206172043/delayed FR:FP +0.12% /zigman2/quotes/201824152/composite TOT +0.18% gained 2%.
Shares of Rémy Cointreau SA /zigman2/quotes/206802273/delayed FR:RCO +1.30% fell 2.9%. The French liquor company was downgraded to sell from hold by Investec.
Air France-KLM /zigman2/quotes/205396176/delayed FR:AF +1.00% fell 1.9% after Air France pilot unions threatened to go on strike on Jan. 11 unless management meets a set of their demands.
Outside the main European index, shares of Debenhams PLC plunged 15% after the department store chain warned on profit after disappointing sales.
Economic news : The final reading on the eurozone’s services purchasing managers index came in better than expected, printing at 56.6. That was higher than 56.5 preliminary reading and up from 56.2 in November. The composite PMI also rose more than forecast, coming in at 58.1, up from 57.5 in November.
In the U.K., the services PMI climbed to 54.2 in December, from 53.8 the previous month.