The European markets rose on Monday, as upbeat economic data from China to the U.S. suggested that the worst of the global economic crisis is over.
Indicating an expansion in China's manufacturing sector, the CLSA Purchasing Managers Index rose in April for the first time in nine months. Reports said citing CLSA Asia-Pacific Markets that the PMI rose to 50.1 in April from 44.8 in the prior month. A reading above 50 suggests expansion in the manufacturing activity.
The National Association of Realtors in the U.S. said its pending home sales index rose 3.2% in March following a downwardly revised 2.0% increase in February. Economists had expected the index to come in unchanged following the 2.1% increase originally reported for the previous month.
The U.S. Commerce Department said that the amount of spending on new construction projects rose 0.3% in March compared to the previous month, climbing to a seasonally-adjusted annual rate of $969.7 billion. Economists had generally expected construction spending to fall by more than 1%.
Meanwhile, the European Commission forecast the 16-nation euro area economy to contract 4% in 2009 and 0.1% next year. In its interim forecast in January, the commission said the euro area will contract 1.9% in 2009 and will grow 0.4% in 2010.
Crude for June delivery rose $0.48 to $53.68 a barrel on the New York Mercantile Exchange, by the time the European markets closed, on hopes that an easing of the global economic recession would pave the way for a recovery in world energy demand.
The FTSEurofirst 300 index of pan-European blue chips closed 1.57% higher at 842.70 points, while the narrower DJ Stoxx 50 index rose 1.36% to 2,054.46 points.
Around Europe, France's CAC 40 index surged up 2.47% to 3,237.97 and Germany's DAX index climbed 2.79% to 4,902.45. The U.K. markets were closed for a holiday.
ArcelorMittal, the world's biggest steelmaker, rallied 12.6% and ThyssenKrupp, Germany's biggest, climbed 8.3%, as the CLSA China Purchasing Managers' Index grew for the first time in nine months in April.
Fiat, Italy's largest carmaker, jumped 8.1% after the company said it may spin off its auto division it's able to purchase General Motors Corp.'s European unit.
Vestas Wind Systems, the world's biggest wind-turbine maker, surged up 10% after Citigroup Inc. upgraded the stock to buy from hold.
Airline stocks advanced after Hong Kong's Cathay Pacific Airways said reservations had withstood the city's first swine-flu case. Also, Mexican President Felipe Calderon said his country is winning the battle against swine flu and may return to normal this week. Air France-KLM, Europe's largest airline, surged up 8.5%, while Lufthansa, the second largest, climbed 5% and Iberia Lineas Aereas de Espana, the biggest largest airline, rose 3.5%.
Swiss Re, world's second biggest reinsurer, gained 2.7% after the company said the industry may see limited claims from the swine flu outbreak because the disease has so far been less lethal than bird flu and can be treated effectively.
Swiss auto parts maker Quadrant soared 27% after the company said Mitsubishi Plastics Inc. and its management are bidding for the remainder of the company in a takeover offer that values Quadrant at about 237 million francs.
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