At the close of the European markets in London the FTSE index closed up 1.89 per cent. Frankfurt’s Dax also made gains as did the CAC 40 in Paris which shot up 2.51 per cent.European shares started to rise at midday on the first day of the third quarter with commodities gaining. Reports on manufacturing in China, Europe and the US added to optimism that the worst of the recession is over with the pace of decline slowing. Retailers led the rally. M&S reported its smallest quarterly decline in almost two years. In the financial sector Commerzbank AG soared 20 per cent after Morgan Stanley said an agreement by German politicians on a revised “bad bank” plan may boost the shares. Vedanta Resources plc led mining companies higher as copper extended its first half gain.
European markets bouyant as decline slows