European stock prices slightly strengthened again on Monday as investor concerns about the state of the U.S. economy dissipated following the release of strong data on sales growth in the U.S. real estate market and new orders for durable goods in the U.S. industry.
In such an environment, the Frankfurt DAX index rose by 0.4 percent to 7,535 points. The London Stock Exchange was closed today due to a holiday. Among the biggest gainers was the French heavy metallurgy group Alstom, whose shares strengthened by 2.7 percent following the announcement that it secured two contracts worth a total of 1.85 billion euros. European stock indices have been rising since August 17, recovering after a sharp five-week correction caused by concerns that an increasing number of defaults on subprime mortgages in the U.S. could translate into significant losses for financial institutions and weaken U.S. economic growth.
"The end of the credit crisis is nowhere near, and I think we will receive more negative news from a number of banks. This will affect their business results, and since banks have some of the largest market capitalizations, it will also reflect on stock indices," assesses Jean-Francois Virolle, Chief Strategist for Global Equities in Paris.
"I do not see a systemic crisis that some feared, but the market could experience new sell-offs," he adds. Shares of Unibail Rodamco, the largest European real estate company listed on the stock exchange, rose by 1.2 percent after reporting an 11 percent increase in net profit in the first half of the year and reiterated its planned target profit growth. The engineering group ABB recorded a 1.6 percent increase in its share price following the announcement of the sale of its Lummus Global business to Chicago Bridge & Iron Company (CB&I) for 950 million dollars. The Nikkei index of the Tokyo Stock Exchange rose by 52.42 points, or 0.3 percent, to 16,301 points. (Hina)
