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European markets close up as Wall Street recovers

European markets close up as Wall Street recovers

European stocks rallied strongly Monday after Wall Street bounced back from early losses, though investors remained wary ahead of key economic news later in the week.
In Europe, Germany's DAX index closed up 108.62 points, or 2.3 percent, at 4,885.09, while France's CAC-40 rose 63.95 points, or 2 percent, to 3,193.68. The FTSE 100 index of leading British shares was up 53.02 points, or 1.3 percent, at 4,294.03.
On Wall Street, the Dow Jones industrial average was up 83.43 points, or 1 percent, at 8,521.82 around midday New York time, while the broader Standard & Poor's 500 index rose 7.81 points, or 0.9 percent, to 926.71. The U.S. indexes had early been down for the day.
The modest gains Monday came as investors awaited a raft of key economic news later in the week.
Thursday is at the forefront of investors' attention as it brings the European Central Bank's latest interest late decision and the closely watched U.S. non-farm payrolls. Analysts expect June's U.S. unemployment rate to rise around 0.3 of a percentage point to 9.7 percent _ President Barack Obama has warned that it will top 10 percent in the coming months.
Equities rose from the middle of March until the start of June on hopes that the U.S. economy in particular will recover from recession sooner than anticipated. Many investors saw fallen stocks as cheap and started buying into the market.
However, a run of downbeat economic news brought an abrupt end to the rally and altered the general mood prevailing among investors. Since the peak of the rally, stocks have shed around 5 percent of their gains.
"Apart from these short, sharp surges, which we have got used to running out of steam recently, it continues to look like stock markets could be stuck in the doldrums for some time," said Anthony Grech, market strategist at IG Index.
"It's difficult to see the next set of economic data striking any more positive notes and so maybe the best we can hope for over the next few months is for stock markets to enter a holding pattern while the broader economy decides whether it is past the worst," he added.
There was some news earlier that the recession for the 16 countries that share the euro may be easing. The EU's official economic sentiment index for euro zone, which rose 3.1 points to 73.3 in June, well above the 71 reading expected in the markets.
Analysts said the data provided further clear evidence that the euro zone economy is no longer in free fall and that the contraction in the second quarter will be less than that experienced in the first three months of the year.
"June's rise _ the third in a row _ adds to the evidence that the cyclical trough is already behind us and that the euro zone economy is likely to contract at a slower rate in Q2," said Daniele Antonucci, European economist at Capital Economics.
In the first quarter, the euro zone shrank by 2.5 percent from the previous three months as demand for its high-value exports, like cars and heavy machinery, slumped with the sharp falls in global trade volumes.
Before Thursday, the markets will likely be fairly volatile given the coincidence of the month-end and the quarter-end, when many investors may look to book profits accumulated or look to stake out some longer-term positions.
"The imminent month-end and usual accompanying rounds of fundamental data should ensure we see more activity in the near term," said CMC Markets dealer Matt Buckland.
Earlier in Asia, Japan's Nikkei 225 index slid 93.92 points, or 1 percent, to 9,783.47, while Hong Kong's Hang Seng index declined 71.75 points, or 0.4 percent, to 18,528.51. Meanwhile, Australia's benchmark sank 0.4 percent to 3,886.9, while South Korea's Kospi slipped 0.4 percent to 1,388.45. Markets in mainland China and India rose.
Oil prices moved back above $70 a barrel. Benchmark crude for August delivery rose $1.81 cents to $70.97 a barrel in electronic trading on the New York Mercantile Exchange.
Meanwhile, the dollar rose 0.6 percent to 95.81 yen while the euro slipped 0.1 percent to $1.4058.
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AP Business Writer Malcolm Foster in Bangkok contributed to this report.


Updated : 2021-07-25 02:36 GMT+08:00