Reuters reported that European shares closed at a two month high on July 3rd 2012, led by gains in ArcelorMittal and other commodity stocks and supported by expectations that policymakers will take further steps to tackle the region's debt crisis.

As per report, the FTSEurofirst 300 index rose by 1% to 1,046.11 points, its highest closing level since it ended at 1,048.07 points on May 1st 2012. The Euro STOXX 50 index rose by 1.2% to 2,320.43 points, marking its highest close since April 27th 2012.

Steelmaker ArcelorMittal gained 5.6%, boosted by an upgrade from broker Kepler, which raised its recommendation to hold from reduce.

Markets extended a rally begun, when European Union leaders cleared the euro zone's bailout fund to inject cash directly into struggling banks.

Securequity sales trader Mr Jawaid Afsar said that "The fact that the banks could be recapitalized directly has given the markets the direction they were looking for. But I suspect that the upside from here is limited to another 100 points. We have to be careful, there are still fundamental problems out there and we would look to take a quick exit on any signs of weakness."

Traders said that markets could also gain further ahead of an expected European Central Bank interest rate cut.

Commodity stocks have rallied since EU summit, on hopes that moves to counter Europe's debt crisis could help the overall global economy, thereby strengthening demand for their products.

Source - Reuters

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