European stocks rebound as Paris tops 4000 points

Europe's main stock markets rebounded on Friday, with Paris jumping above 4,000 points for the first time since July 2011 as traders went bargain-hunting after earlier losses, dealers said. Paris's CAC 40 index climbed 0.56 percent to close the day at 4,001.27 points. Meanwhile in Frankfurt the DAX 30 index closed with a fresh record high after gaining 0.34 percent to 8,398 points, and London's FTSE 100 index added 0.53 percent to 6,723.06 points. Rome added 0.34 percent to 17,604 points and Madrid rose 0.47 percent to 8,582.4 points. "What we are seeing here is just another case of buying the dips," analyst Craig Erlam at trading group Alpari said. Markets had traded in negative territory for much of the morning, after overnight losses on Wall Street, as sentiment was hurt by weak economic data and speculation that the Federal Reserve was mulling an exit to its quantitative easing (QE) stimulus policy, dealers said. "Earlier in the session, European stocks were in negative territory following the comments from two members of the Fed that suggested we could see the asset purchases phased out as early as this summer," Erlam told AFP. "As we have seen on numerous occasions recently, this has just been taken as an opportunity to buy the dip and continue to drive the indices. He added: "The fact that the threat of asset purchases being scaled back as early as this summer hasn't been taken too seriously (and) shows that very little is going to stop these indices continuing to hit new highs. "At this stage it seems that only suggestions from (Fed chief) Ben Bernanke himself about the scaling back of asset purchases will bring investors back down to earth." According to Dow Jones Newswires, Federal Reserve Bank of San Francisco President John Williams said he was open to scaling back the Fed's bond-buying programme in the coming months if the economy continued to improve. Philadelphia Fed President Charles Plosser had already hinted at a potential tapering out of the US central bank's QE stimulus. "In light of reports this week that the Fed has mapped out a plan to exit QE, traders are on edge about the prospects of the US economic recovery," said ETX Capital analyst Ishaq Siddiqi. "Markets... are unsure if the US economy can go at it alone without the support of the central bank in forthcoming months." In foreign exchange deals on Friday, the European single currency slid to $1.2814 from $1.2881 late in New York on Thursday as the greenback won support from a solid report on US consumer sentiment. The rise in the University of Michigan's index on consumer sentiment to 83.7 in May, above the 78.5 estimated by analysts, also helped push up stocks on Wall Street. In midday trade the Dow Jones Industrial Average was up 0.42 percent to 15,296.64 points, the broad-based S&P 500 increased 0.49 percent to 1,658.52 points, and the tech-rich Nasdaq Composite Index rose 0.47 percent to 3,481.67 points. Asian stock markets meanwhile turned in a mixed performance, with sentiment also hit by losses in New York on Thursday. Tokyo gained 0.67 percent, Shanghai stocks added 0.21 percent and Sydney rose 0.29 percent, while Taipei fell 0.26 percent. Hong Kong and Seoul markets were closed for public holidays. Elsewhere on Friday, the yen remained pressured by Japan's enormous monetary easing policies. The euro rose to 132.04 yen from 131.74 on Thursday. It had soared as high as 132.77 yen on Tuesday, touching the highest level since January 2012. And the dollar rose as high as 103.13 yen on Friday, the highest level since the beginning of October 2008. It later settled back to 103.04 yen, up from 102.25 on Thursday. On the London Bullion Market, the price of gold dipped to $1,368.75 an ounce, from $1,381 late on Thursday.