European shares rose on Monday to extend a recovery after hitting low points in late June, as Chinese economic data eased fears over a slowdown in that country and boosted sentiment, Reuters reported.
Banks were among the top performers as better-than-expected earnings from US bank Citigroup lifted financial stocks and enabled the STOXX Europe 600 Banking Index to rise 0.8 per cent.
The pan-European FTSEurofirst 300 index closed up 0.4 per cent at 1,199.92 points while the euro zone’s blue-chip Euro STOXX 50 index also gained 0.4 per cent to 2,686.69 points.
Some traders said technical indicators pointed to further near-term gains, with the Euro STOXX 50 rising on Monday above its 100-day simple moving average of 2,683 points – seen by some technical traders as a sign of more gains to come.
The FTSEurofirst 300, which is up six per cent since the start of 2013, had hit a five-year high in late May of 1,258.09 points.
It then fell to a 2013 low of 1,111.11 points in late June on expectations the US Federal Reserve would scale back economic stimulus measures but has since recovered this month as central banks have sought to reassure that they will continue to support the global economy.
Rupert Baker, a European equity sales executive at Mirabaud Securities, used the recent pullback to buy up stocks.
“I’ve been buying the dips. Valuations in Europe are undemanding compared to the United States, and economies are in the process of crawling off the bottom,” he said.
Companies in the pan-European STOXX 600 index, which closed up 0.4 per cent, are forecast to trade on an average price to earnings-per-share (P/E) ratio of 12.4 times for the next 12 months, according to the Thomson Reuters StarMine “smartestimate” which favours top-rated analysts.