European stock markets rose to see the new trading year in, after earlier gains in Tokyo, as dealers returned to their desks in upbeat mood for the first trading day of 2010.

In morning trading, London's FTSE 100 index of leading shares added 0.67 percent to 5,449.33 points, the Paris CAC 40 index increased 1.08 percent to 3,979.02 points and Frankfurt's DAX 30 index won 0.90 percent to 6,011.02.

The DJ Euro Stoxx 50 index of top eurozone shares rose 0.93 percent to 2,993.71.

"The FTSE 100 started the year on the front foot, led by the heavyweight banks and energy firms," said analyst Nicola Poskitt at spread-betting firm City Index.

"We have seen investors coming in this morning in positive moods and firmly looking for equity markets to continue their moves higher after last year saw the FTSE rally 22 percent.

"The sentiment is still on the recovery theme and considering the fact that historically the first trading day of the year usually ends with gains, this morning's rally is no surprise."

All three main European markets, which had closed early last week for the New Year holiday weekend, each gained more than a fifth last year amid growing investor confidence over economic recovery.

London and Paris each gained more than 22 percent in 2009, while Frankfurt won almost 24 percent last year.

In earlier Asian trading on Monday, Tokyo struck a 15-month high as investors cheered a weaker yen and the Japanese government's plan to expand a credit line to troubled Japan Airlines.

"Today sees the markets on the up," added Capital Spreads analyst Simon Denham.

"This is not exactly surprising as the first day of virtually every year seems to be positive as funds look to place at least a bit of their cash pot."

The energy sector was lifted as world oil prices soared beyond 80 dollars per barrel.

Crude oil jumped higher on Monday, driven by expectations of higher demand in the northern hemisphere winter, and after Russia cut crude supplies to Belarus.

Stock markets were also boosted by encouraging economic data in the eurozone on Monday.

Manufacturing activity across the eurozone expanded in December but at a slower pace than initially detected and with the shadow of price pressures building, a survey showed.

The 16-nation euro currency bloc's purchasing managers' index (PMI) for the manufacturing sector, published by data and research group Markit, rose to 51.6 points in December, from 51.2 points in November.

It was the third month running in which the widely-watched reading has been above the crucial 50.0 boom-or-bust line, but the readings were uneven.


Meanwhile, in Asia on Monday, Japan's benchmark Nikkei-225 index jumped 1.03 percent to 10,654.79 -- which was the best finish for the Tokyo Stock Exchange since early October 2008.

Japan Airlines (JAL) shares soared by more than 30 percent after the government on Sunday agreed to double a state-funded loan to the cash-strapped carrier to 200 billion yen (2.2 billion dollars).

The Tokyo Stock Exchange, meanwhile, introduced a new faster trading system on Monday, stepping up its efforts to stay ahead of rival Asian bourses, following a series of technical problems in recent years.

Expatica/ AFP