By Agency Reporter

Wednesday, 8 Dec 2010

European shares hit a 26-month high on Tuesday, with commodity issues gaining on strong crude and metals prices.

By 12.24 GMT, the pan-European FTSEurofirst 300 .FTEU3 Index of top shares was up 1.3 per cent at 1,119.31 points, having earlier hit its highest intraday level since late September 2008.

Mining shares were among the biggest gainers, as copper prices surged to a record high on an improving demand outlook and tight supply. Eurasian Natural Resources, Kazakhmys and Xstrata rose 3.2 to 4.1 per cent.

A rally in crude prices CLc1 to above $90 a barrel helped energy firms push higher, as the cold snap in Europe and the United States lifted fuel demand. Oil majors BP, Total and ENI added 1.5 to 2.2 percent.

US President Barack Obama, on Monday unveiled a compromise deal to extend all Bush-era tax cuts for two years, not just for the middle class, but also for wealthier Americans, in a move seen as helping to spur consumer spending.

”US activity is reliant on consumer spending so any move to help consumer start spending money particularly in the Christmas period is going to be seen as positive for the markets,” said Joshua Raymond, market strategist at City Index.

Retailers were also on the rise, with British group Tesco, the world‘s number three retailer, up 2.1 per cent after it said overseas markets drove a 7.2 per cent increase in third-quarter sales. Sainsbury (SBRY.L) rose 4.2 per cent, with traders citing market talk of interest from Qatar.

Across Europe, Britain‘s FTSE 100 Germany‘s DAX, and France‘s CAC 40 rose 1.1 to 1.3 per cent.

 

Source: Punch