European shares finished at their highest in nine months as solid results from major European banks and the latest US manufacturing data increased hopes the recession is moderating. Stocks extended their gains after the US Institute for Supply Management said its national factory activity index rose more than expected in July.Banks and commodity stocks were the standout performers. HSBC’s shares hit a seven-month high and Barclays were at their best since October.
Commodity stocks gained as crude oil prices rose almost three percent and copper reached a ten month high. One reason for that rally was two surveys showing Chinese factory growth accelerated in July.
The dollar hit its lowest point this year against a basket of currencies.