European stocks gains on rate hopes

Reuters

London, Oct 26: European shares surged as trading got under way on Monday, boosted by hopes of rate cuts and taking heart from the strength of the dollar against the mark. After a tentative start in Germany, stock markets from Madrid to London and Paris to Frankfurt raced into positive territory, shrugging off overnight losses in Asia. The dollar was at a session high against the yen as gloom about the Japanese economy was fanned by Bank of Japan regional reports and after Moody's put eight Japan insurers on negative review. It traded firm if in a small range against the mark, partly affected by uncertainties about economic policies to be pursued by a new centre-left German government led by Chancellor-elect Gerhard Schroeder, which will be sworn in on Tuesday

In share markets, strong sentiment in car stocks drove trading in Frankfurt above the 4,500 level as the dollar strengthened to more than 1.65 marks. In electronic trading,the Xetra DAX was up 1.9 percent at 4,565.01, up 84.58, after opening lower.The floor DAX was at 4,555.64, up 104.55 or 2.4 percent. Daimler gained 3.4 percent after saying that 97 percent of shareholders had agreed to swap their shares for DaimlerChrysler shares. Swapped shares traded at 138.75 and the remaining three percent traded up 3.4 per cent at 138.50.

In London, the FTSE 100 jumped at the start to see gains of 100 points in early trade, before falling back slightly, as interest rate hopes lifted shares across Europe.

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