European shares jump at start of new quarter

A report on Spanish banks has showed the sectors problems were no worse than feared.Even evidence that the euro zones economy was heading for a second recession in three years failed to dampen demand, with many investors hoping aggressive central bank action to boost activity will lead to pick up.The FTSEurofirst 300 index of top European shares, which lost 2.7 percent last week, was up nearly one percent at 1,098.78 points.The German Dax was up 1.1 percent, Britains FTSE 100 index was up 1.0 percent, and the French CAC 40 rose 1.3 percent. U.S. stock index futures pointed to ahigher open on Wall Street .We are in a new quarter and seeing some fresh buying across the board. Given the background that we have at the moment, with incredibly low interest rates, equities are being seen as the value proposition and its hard to get too bearish, Paul Kavanagh, partner and equity strategist at Killik & Co, said.The gains in Europe came as a new business survey showed the euro zone manufacturing sector had put in its worst performance in the three months to September since the depths of the financial crisis.The sector will act as a severe drag on economic growth. It therefore seems inevitable that the region will have fallen back into a new recession in the third quarter, said Chris.Williamson, chief economist of the data collator Markit.The euro bounced off a three week low after the data came out to be up 0.3 percent at $1.2895, as investors preferred to sell the dollar because of the expected impact of the Federal Reserves decision last month to ease policy.The latest data on Europe followed weak readings from other surveys in China and Japan and a sharp fall in exports during September from South Korea, the worlds seventh-largest exporting nation.However, the new data covers the period up to September when major central banks, in particular the Fed, pledged to pump more liquidity in to the financial system - policies which have yet to impact on economic activity.