Euro Shares Start 2009 with 2.6% Rise

European markets got the new year off to a positive start, with gains in commodity and bank stocks.

The FTSEurofirst 300 index of top European shares rose 2.6 percent to close unofficially at 853.74 points.

The index rose 6.2 percent over the shortened week, a welcome reprieve from the 44 percent it lost in 2008.

The rise for shares on Friday came despite the first economic news of 2009 — notably in manufacturing and housing — being just as downbeat as that of the latter half of 2008.

Market researchers Experian said on Thursday the downturn in consumer spending will drive over 1,600 British retailers out of business in 2009, triggering thousands of job losses and leaving more than one in 10 shops empty.

In the UK, house prices in Britain fell by a bigger-than expected 2.2 percent in December for an annual drop of 16.2 percent, the country's biggest mortgage lender Halifax said.

In another sign the world's largest emerging markets were wilting under the recession that has gripped most industrialized nations, factories in China, India and Russia slashed output and jobs at a record pace in December.

Analysts say all the bad news is already in the share prices.

"From a contrarian point of view, it's encouraging. If you don't buy now, you will never buy," said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Germany.

"Every headline I see, every estimate I see on the economy is bad, and the expectations are so, so low."

Oil shares added most to the index, as crude futures managed to retain most of their gains from the previous session, and were trading above $44 a barrel.

BP, ENI Royal Dutch Shell and Total were up about 4 to 5 percent.

Banks posted strong gains, after sliding 65 percent last year.

Across Europe, Germany's Xetra Dax index, France's CAC 40-share index and Britain's FT-SE 100-share index were up about 2.5 to 3.5 percent.

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