European stock markets continued their rally today, as benchmark indices hit their highest level in more than two years on expectations of strong US jobs data tomorrow.
However, the Dublin market was lower this lunchtime. The Iseq index of Irish shares was down 2.8 per cent at 2,867 at 1.45pm, with most of the main stocks, including financials, in negative territory.
By 12.30pm, the FTSEurofirst 300 index of top European shares was up 0.9 per cent at 1,152, a level not seen since mid-September 2008.
The euro zone's blue-chip Euro STOXX 50 index was up 0.9 per cent at 2,859, with key resistance looming at 2,890, a closing high in mid-November.
Shares of financial institutions, which had underperformed the broad market in 2010, featured among the top gainers today , with Credit Suisse up 2.9 per cent, UBS up 2.5 per cent and AXA up 4.6 per cent.
The rally, however, was clouded by a drop in shares of Spanish banks, hurt by nagging worries over the country's debt level. Santander was down 0.6 per cent, BBVA down 1 per cent and Bankinter down 0.4 per cent.
After dropping 17 per cent last year, Spain's IBEX has lost 0.4 per cent since the beginning of the year, falling behind the 2.7 per cent rally on the FTSEurofirst 300.
"There is still a lot of hesitation. Investors await the first big sovereign debt auctions in the euro zone to see how it goes, and if this week's Portuguese T-bill auction is any indication, it's going to be a bumpy road," said Catherine Garrigues, head of equities at Allianz Global Investors Europe.
"However, macro data is quite good, and valuation levels remain low."
Forecast-beating US private-sector jobs figures on Wednesday helped boost sentiment, ahead of the key US payrolls figures expected tomorrow.
Despite the sharp December rally and the gains so far in 2011, European stock valuation levels remain relatively low, with the STOXX Europe 600 carrying a forward price-to-earnings (P/E) ratio of 10.8, below a 10-year average of 13.7, according to Thomson Reuters Datastream. This compares with a forward P/E ratio of 13.1 for Wall Street's S & P 500.
Around Europe, UK's FTSE 100 index was up 0.7 per cent, Germany's DAX index up 1.2 per cent, and France's CAC 40 up 0.9 per cent.
Reuters
