European stocks hit 27-month high

European stocks hit a 27-month closing high on Monday, with utilities gaining as freezing temperatures boosted demand for energy and miners rising on buoyant metals prices. But trading was seasonally quiet ahead of the Christmas holidays. The FTSEurofirst 300 index of top European shares rose 0.6 percent to 1,133.43 points, the highest close since September 2008, the month of the collapse of Wall Street firm Lehman Brothers. It also hit a 27-month intraday high.
Utilities gained, as sub-zero temperatures boosted energy demand. The sector, one of the weakest performers in 2010, was also catching up with recent gains for the wider market. GDF Suez, Iberdrola, National Grid and Endesa rose between 2 and 3.5 percent.
"The markets may be saying eurozone debts are a sovereign issue now, not a systemic issue," said Richard Batty, strategist at Standard Life Investments in Edinburgh, citing the safety net that European leaders said would be set up in 2013. The euro fell broadly on Monday, hitting a record low against the Swiss franc, with more losses likely as investors fretted over eurozone debt.
But Batty said the weakness of the euro would mean higher profits for some eurozone exporters The weather hurt airlines, which cancelled hundreds of flights. British Airways, easyJet, Ryanair, Air Berlin and Air France fell between 1 and 1.9 percent. Most miners gained as metal prices rose, with copper up near record levels. Antofagasta, Eurasian Natural Resources Corp and Lonmin rose between 0.7 and 1.1 percent.
The European benchmark is up more than 75 percent from its record low of March 2009, with several major economies having emerged from recession, helped by stimulus from governments and central banks world-wide. Britain's FTSE 100, Germany's DAX and France's CAC40 rose between 0.3 and 0.5 percent. The eurozone's blue chip Euro STOXX 50 index rose 0.6 percent to 2,839.22, above the 38.2 percent Fibonacci retracement of its drop to a 2009 low from a 2007 high. "December's rally is almost done and the market is somewhat overbought in the short term, but it does not mean the bullish trend is over," said Vincent Ganne, technical analyst at IG Markets, Paris.
Most banks were higher and Italy's Banco Popolare rose 5.6 percent, helped by a Goldman Sachs upgrade to "neutral" from "sell". But Greek stocks bucked the trend, with Alpha Bank down 5.9 percent and National Bank off 4.7 percent, hit by fears of a credit rating downgrade for the country's debt, traders said. "The market is climbing nicely and investment themes such as exposure to emerging markets are intact going into the next year," said David Thebault, head of quantitative sales trading at Global Equities, in Paris.