European stocks enjoy 'Santa rally'
Oil prices rebounded modestly in early trade, but later turned down.
LONDON (AFP) - Europe s main stock markets rose strongly on Monday in a renewed "Santa rally" powered by a modest recovery in oil prices early in the day, dealers said.
London s benchmark FTSE 100 index climbed 0.48 percent to 6,576.76 points, the Paris CAC 40 added 0.30 percent to 4,254.43, and in Frankfurt the DAX 30 rose 0.81 percent to 9,865.76.
The euro rose to $1.2254 after sliding as low as $1.2220 in earlier Asian deals, matching Friday s two-year trough that was reached as the Federal Reserve signalled it may raise US interest rates in the middle of 2015.
"For the moment many of the worldwide indices have chosen to side with Santa, and have continued to rally despite oil s renewed slip," said Spreadex trader Connor Campbell.
- Oil prices turn down -
London s Brent crude for February delivery shed $1.35 to $60.03 per barrel in late trading, and US benchmark West Texas Intermediate (WTI) for February fell $1.68 to $55.45 a barrel.
Oil prices had rebounded on Friday, wiping out losses earlier last week that saw prices hit fresh five-year lows on the back of ample supplies and mounting demand worries.
Oil has however shed about half its value since June, and a decision in November by the Organization of Petroleum Exporting Countries (OPEC) to maintain output levels despite falling prices has weighed heavily on the market.
Trading volumes meanwhile remained low with many investors away from their desks for the traditional Christmas and New Year holiday shutdown.
The Frankfurt stock market closes for Christmas at the end of trading on Tuesday, while London and Paris will shut down at lunchtime on Wednesday.
- Focus remains on oil -
"As we head towards the Christmas break and a short week, the main focus going forward is likely to remain on the recent volatility in the oil price, particularly if we get a fresh bout of selling pressure," said CMC Markets analyst Michael Hewson.
He added there were widespread concerns that further oil market declines "could prompt instability in oil-producing countries like Venezuela, Angola, Nigeria and Ecuador, and of course not forgetting Russia, as these countries struggle to balance their books, against a weakening currency, and a much weaker oil price."
Elsewhere, Asian equities also rose in thin trade Monday amid the festive season, tracking cues from Wall Street where stocks had also surged in a Fed-fuelled "Santa Claus rally" last week.
Indications that the US Federal Reserve will not raise interest rates in the coming months helped reassure investors and stocks returned to an upward trajectory.
Sydney soared 1.94 percent, Seoul gained 0.68 percent, Hong Kong climbed 1.26 percent and Shanghai was up 0.61 percent, while Tokyo closed flat.
Wall Street stocks were mostly higher ahead of a heavy day of economic data releases Tuesday.
The Dow Jones Industrial Average was up 0.45 percent to 17,885.33 points in midday trading.
The broad-based S&P 500 edged down 0.02 percent to 2,070.32, while the tech-rich Nasdaq Composite Index added 0.08 percent to 4,768.99.
Investors were looking ahead to Tuesday s economic reports, which include the third estimate of third-quarter gross domestic product and durable goods orders for November.
In Monday deals on the London Bullion Market, gold slid to $1,195.25 per ounce from $1,195.50 on Friday.
