European shares surge as investor concern over Iraq stand-off eases

BRITAIN’S leading shares surged to their biggest one-day percentage gain in more than 15 years yesterday, fighting back from the previous session’s sharp sell-off as concern over the international stand-off on Iraq eased.

Ireland's benchmark ISEQ advanced 80.70 points, or 2.2%, to 3830.36 in Dublin.

It was the biggest rise in more than five weeks.

Benchmarks rose in all of Western Europe's 17 markets, led by the Amsterdam Exchanges Index's 10% jump. The FTSE 100 benchmark index jumped 199.9 points, or 6.1%, to 3,486.9 its second biggest rise in percentage terms. Total volume was a hefty 3.2 billion shares.

The only time the FTSE notched up a bigger percentage gain was on October 21, 1987 when it rose 7.9%, one day after the market crashed more than 12%. Dealers also said investors were moving to cover short positions after Wednesday's 166-point drop and as concerns eased about an imminent war in Iraq. The United States has said a vote on another United Nations resolution, which would open the way for military action, may now be postponed until next week.

European stocks rose, lifting the Dow Jones Stoxx 50 and 600 indexes from six-year lows. Royal Philips Electronics NV climbed after saying it will shed jobs to cut costs, and Fortis gained as the financial company preserved its dividend and said it will make the payout in cash, not shares.

"There is no question that stocks are cheap now after the big collapse we've had,' said Jean-Pierre Hellebuyck, vice chairman of Axa Investment Managers, which oversees 280 billion euros ($304 billion) of assets.

The Stoxx 50 added 6.3% to 2029.88 at 5:15pm in London, cutting its loss in 2003 to 16%. The Stoxx 600 gained 5.5% to 171.52. Germany's benchmark DAX Index ended a seven-day losing streak, its longest in 3 1/2 years.

The French CAC 40 Index, which also ended a seven- session decline, climbed 6.3%.