European stocks rose on Tuesday, with investors in bullish mood after Wall Street notched up a fourth straight record close and Tokyo’s Nikkei hit a seven-year high on talk that a Japanese sales tax increase may be delayed.
The gains in Tokyo stocks helped push the yen lower versus the dollar. The greenback hit a seven-year high against the Japanese currency as it recovered from losses chalked up after Friday’s below-forecast U.S. payrolls data.
Oil prices fell further, with Brent crude dropping to a four-year low below $82 a barrel.
European shares were also boosted by positive updates from companies including Germany’s Henkel and Hochtief . The pan-European FTS Eurofirst 300 index rose 0.4 percent.
“So far German results have been slightly better than expected,” said Gregor Kuhn, an analyst at IG, who thought the strong corporate numbers would support the DAX index for the remainder of the year.
“Expectations had been downgraded before the reporting season and Russia was one of the reasons. The other one was economic weakness in the euro zone, but I think that is priced in by now.”
The Nikkei share average rose 2.1 percent to its highest close since October 2007 on speculation that Prime Minister Shinzo Abe might postpone a sales tax increase planned for next October and call a snap election.
An April hike in the tax by 3 percentage points chilled consumption in the second quarter, driving the world’s third largest economy into its sharpest slowdown since the global financial crisis.