Stocks

Europe share index hits highest since 2000 as euro slips again

Reuters PARIS | Updated on January 23, 2018 Published on April 10, 2015

The pan-European FTSEurofirst 300 share index powered ahead to its highest level since 2000 on Friday as the euro hit its lowest level since mid-March.

At 0824 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 per cent at 1,636.67 points, surpassing its 2007 peak and taking its gains so far this year to 20 per cent.

Germany's DAX index, which includes dividends, was up 0.6 per cent, hitting a fresh record high, while France's CAC 40 was up 0.2 per cent to its highest level since 2008. The UK's FTSE 100 index was up 0.3 per cent, hovering below a record high hit in March.

Shares in Carrefour featured among the top gainers, up 2.7 per cent after the world's second biggest retailer reported better-than-expected quarterly sales, driven by growth in Latin America and an improvement at its domestic hypermarkets.

The euro's fall over the past year is seen supporting a recovery in the region's growth and in corporate profits. The single currency, which fell to 1.0605 against the dollar on Friday, has slipped more than 3 per cent so far this week.

European stocks have risen sharply this year as global investors increased their exposure to the region on expectations the euro's slide would give companies a major lift, as roughly 50 per cent of euro zone earnings come from outside the region.

"The focus is back on the forex market. It's mostly the dollar rising, and while it's very good news for European earnings, the negative impact on US results could be quite significant," said Naeem Aslam, chief market analyst at Ava Trade, in Dublin.

Strategists have said a drop of 10 per cent in the euro versus a basket of currencies translates into a 6 to 8 per cent rise in European profits. With the euro down about 16 per cent against the other currencies over the past year, profits are poised to get a 10-13 per cent boost.

This contrasts with a recent deterioration in US earnings forecasts, driven lower in part by the stronger dollar. First-quarter S&P 500 earnings are projected to have declined by 2.8 per cent from a year ago, which would make the quarter the worst for results since the third quarter of 2009.

Published on April 10, 2015
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