Skip to Content
Market Update

Fed Optimism Spurs Gains in Europe

European markets were trading sharply higher Thursday, tracking gains in Asia after the U.S. Federal Reserve hinted it would not start paring its current asset-purchase program over the short run.

At 9:14 a.m. in London, the FTSE 100 was up 1% and so was the CAC 40 Paris. The Dax Frankfurt rallied 1.1% at the time of writing.

Equity markets across the globe reacted with gains after Fed chairman Ben Bernanke said the U.S. central bank would continue with "accomodative monetary policies" over the "forseeable future" as low inflation levels and high unemployment rate continue to be a cause of concern.

Bernanke was speaking at a press conference following the release of minutes of the Federal Reserve's latest policy meeting, which showed members of the FOMC remained divided as to when the bank should start scaling back its monetary stimulus program.

Stocks on the Move

Miners were racing ahead with sharp gains as improved risk-sentiment on heels of Bernanke's comments propelled prices of commodities.

Leading miners BHP Billiton plc. and Rio Tinto Plc. soared over 4% in London while Anglo American Plc. bounced 5.4%. Glencore Xstrata Plc. gained 4.3%.

Among oil stocks, Premier Oil Plc. rose 3.3% after the firm said it has agreed to acquire a 40% interest in the PL407 production license off Norway.

Others in the sector were trading mixed. BP Plc was flat while Royal Dutch Shell moved 1.3% higher.

In corporate news, food, home and personal care products group Unilever Plc. increased its stake in India-based Hindustan Unilever to 67.26%. Shares of Unilever were up 1.2% in response.

Among other movers, Hays Plc. surged more than 5% after reporting fiscal fourth quarter results, while EasyJet Plc. slipped 0.8% ahead of a shareholder vote later today on an order for 135 Airbus SAS jets.

French power equipment manufacturer Alstom SA climbed 1.6% after signing a cooperation deal with China's Dongfang Electric Corp. to supply turbines and alternators for nuclear reactors.

Among financials, French lenders Societe Generale SA rose 2.4% while BNP Paribas SA gained 1.6%.

Germany-based Deutsche Bank AG moved up 2.2% while Commerzbank AG vaulted 2.7%. London-based Lloyds Banking Group Plc. tacked on a percent while Barclays Plc. added 1.8%.