European stocks climb again, fuelled by Yellen's view on rates
European stocks climbed for a fourth day this week after comments by Federal Reserve Chair Janet Yellen spurred optimism about the economic recovery, while she reiterated that the central bank will take a gradual approach to raising borrowing costs.
By the close in Dublin, the ISEQ Overall Index was up 0.85pc, or 52.2 points, to end the trading week at 6,170.20. The leaders on the Dublin market included packaging giant Smurfit Kappa, which increased 3.6pc to €22.75, while drinks group C&C rose 2.5pc to €3.84. The laggards included insurance group FBD, which fell 0.3pc to €7, while speciality baker Aryzta remained broadly unchanged at €34.12.
Elsewhere, the Stoxx Europe 600 Index rose 0.5pc, erasing a decline of as much as 0.3pc and taking its weekly advance to 1.1pc. Ms Yellen said the case to raise interest rates is getting stronger as the US economy approaches the central bank's goals, though she didn't discuss the specific timing of a move.
Traders now see a 34pc chance that the central bank will raise borrowing costs next month.
"The economy has strengthened in a way that is following the path of the Fed," said Guillermo Hernandez Sampere, head of trading at MPPM in Eppstein, Germany.
"A possible September hike is off the table, but for sure they will start the hiking process quite soon, so chances are the bets will be on December if we totally don't get disappointing data in Q3. I think we will see higher markets at the end of the year." While European equities advanced, they've alternated between weekly gains and losses all month, with the Stoxx 600 trading in a tight range and struggling to find a direction after a rebound of as much as 12pc following the aftermath of Britain's secession vote.
The volume of shares changing hands yesterday was about a third lower than the 30-day average.
Additional reporting by Bloomberg