Fed plans boost European stocks
Published 15/11/2013 | 01:00
EUROPEAN stocks advanced yesterday for the first time in three days as US Federal Reserve chairman nominee Janet Yellen said she is committed to promoting a strong US economic recovery and will ensure monetary stimulus isn't removed too soon.
The Democrat nominee said the economy and labour market were performing "far short of their potential" and must improve before the central bank could begin reducing monetary stimulus.
"The market is interpreting Yellen's comments as she will continue the policy, or even go deeper," said Paris-based wealth manager Nathalie Pelras.
"She meant the economy needs more liquidity and that the Fed cannot take it out very quickly. Without that, the market would not be supported."
National benchmark indexes rose in 16 of the 18 western European markets yesterday. France's CAC 40 added 1pc, Germany's DAX climbed 1.1pc and the UK's FTSE 100 increased 0.5pc.
The composite Stoxx Europe 600 Index gained 0.8pc to 322.43 at the close of trading. The gauge has rallied for the past five weeks as the Fed maintained the pace of its bond purchases and the European Central Bank lowered its key interest rate.
Stocks rose here as the Government announced Ireland will leave the bailout without a precautionary credit line in place. The ISEQ Overall Index closed up 21.11 points or 0.47 pc to 4,490.80.
Prime Active Capital saw the biggest gains of the day, up 15pc to 12c. INM followed, gaining 10pc to 11c. Newry-based financial technology firm First Derivatives jumped 9pc to €11.80 after Panure Gordon upgraded the price target for its stock.
PTSB added 4pc to 4c. It is still awaiting the European Commission's approval of its restructuring plan, but was buoyed by a statement by AIB, which confirmed that bank is close to gaining approval.
Mining companies led the leaderboard in terms of losses for the second day in a row. Great Western Mining plummeted a massive 60pc to 1c while Ormonde Mining sank 10pc and Fastnet shed 8pc to 19c. Meanwhile, ferry company Irish Continental lost 3pc to €25.15.