European shares rise to new record

Trader James Doherty works on the floor of the New York Stock Exchange. File photo / AP

European stocks rose overnight, pushing a regional equity benchmark to a record high, after better-than-expected data from Germany and after Greece said it made a key payment to the International Monetary Fund.

Greece's payment keeps the country on track in talks with international lenders about receiving the remainder of its financial bailout, needed to keep the country afloat and part of the euro zone.

In other good news, a report showed German industrial production rose a better-than-expected 0.2 per cent in February, underpinning optimism about the euro-zone's engine economy as the European Central Bank is executing its record bond-buying program.

"The fundamental upward trend in German industry is intact, despite some monthly volatility," Andreas Rees, chief German economist at UniCredit, told Reuters.

The Stoxx Europe 600 Index climbed to a record, ending the day with an advance of 1.1 per cent from the previous close. The UK's FTSE 100 Index also gained 1.1 per cent, as did Germany's DAX, while France's CAC 40 Index rallied 1.4 per cent.

"This year Europe is in favour because of the huge QE put in place by the ECB," Pierre Mouton, who helps oversee US$8 billion at Notz, Stucki & Cie in Geneva, told Bloomberg. "On one side, you have the US with a good economy and a market that has already gone up a lot. On the other side, you have Europe with a nascent recovery and a market that has only started to perform."

In contrast to Europe's advance, Wall Street fluctuated. In late afternoon trading in New York, the Dow Jones Industrial Average gained 0.17 per cent, the Standard & Poor's 500 Index rose 0.20 per cent, while the Nasdaq Composite Index increased 0.16 per cent.

In the Dow, gains in shares of General Electric and those of Johnson & Johnson, last up 2.6 per cent and 1.1 per cent respectively, outweighed declines in shares of Home Depot and those of Boeing, down 0.8 per cent and 0.5 per cent respectively.

The Wall Street Journal reported that GE is near a deal to sell US$30 billion of real estate assets to Blackstone and Wells Fargo.

Shares of Alcoa slid, recently down 4.1 per cent, after the world's largest aluminium company reported quarterly sales that fell short of expectations and predicted a supply glut for aluminium this year.

Also punished were shares of Bed Bath & Beyond, last 6 per cent lower, after it posted both disappointing earnings and a weak outlook.

Still, analysts were upbeat about the earnings season ahead.

"We're positioned for an upside move as expectations have been lowered to the point where we're set up for a positive surprise, though there is a risk in some of these early reporters setting a negative tone," Jim McDonald, chief investment strategist at Northern Trust Asset Management in Chicago, told Reuters.

There was good news from the labour front. Initial claims for state unemployment benefits rose 14,000 to a seasonally adjusted 281,000 for the week ended April 4, according to the Labor Department