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Dollar lifts Dutch shares to new all-time high

AMSTERDAM: Dollar strength and investors' undiminished appetite for equities drove Dutch shares to a new all-time closing high.

The AEX index of 25 blue chip stocks vaulted effortlessly over the 540 hurdle for the first time in early trade and closed 7.69 points or 1.43 percent firmer at 544.77.

"The U.S. is down again at the opening today, but Europe is holding up quite nicely," said one cheerful dealer.

Amsterdam, as one of Europe's most dollar-sensitive bourses, was one of the main beneficiaries of the U.S. currency's rally.

But prices were also firmly underpinned by traditionally cautious Dutch institutions' new-found appetite for equities.

Many have only recently been freed of restrictions on equity investment while others have simply been lured by historical evidence that shares offer the best long-term return.

"From a historical viewpoint, current multiples look expensive, but increasingly investors are valuing shares on the basis of free cash-flow and Amsterdam still looks relatively cheap on that basis," said one dealer.

Royal Dutch Petroleum closed 3.00 guilders higher at 245.90 as continuing oil price firmness sustained a month-long rally in the shares which have a maximum 10 percent weighting in the AEX.

Supermarkets group Ahold - with over 50 percent of its sales in the U.S. - also closed three guilders firmer at 88.20 on the back of the stronger dollar.

Philips Electronics shook off earlier modest losses prompted by news of slower U.S. semiconductor orders to close 0.40 better at 58.70.-Reuter