Europe’s main stocks shot higher yesterday after US Federal Reserve chief Ben Bernanke indicated that the end was not near to its easy money policies.
London’s FTSE 100 index of leading shares added 0.53% to 6,840.27 points to stand at a 13-year high, while in Frankfurt the Dax 30 index set a fresh record high, climbing 0.69% to 8,530.89 points.
In Paris the Cac 40 rose 0.37% to 4,051.11 points, a two-year high.
“After trading for most of the day in or around break even European markets went on another ramp higher as [Bernanke] ... reinforced the prospect that we remain quite some way from ... the Fed adjusting the pace of their current stimulus programme,” said CMC Markets Analyst Michael Hewson.
Bernanke’s “comments in prepared remarks that ‘premature tightening risks slowing or ending the recovery’ sent the Dax to new record highs and the FTSE100 ever closer to its all-time highs at 6,950,” he added.
US stocks also moved higher, with the Dow Jones Industrial Average gaining 0.68% to stand at 15,492.26 points in afternoon trading.
The broad-based S&P 500 added 0.62% to 1,679.50, while the tech-rich Nasdaq Composite Index moved up 0.46% to 3,5018.08.
On the London Bullion Market, the price of gold rose to $1,408.50 an ounce from $1,360.75 late on Tuesday.
And the Swiss franc slid to a two-year low at 1.2624 francs to the euro, following comments by the head of the Swiss central bank refusing to exclude setting negative interest rates to dull the attractiveness of Switzerland as a safe haven to park cash.
In foreign exchange activity, sterling slid to $1.5037 from $1.5154 late in New York on Tuesday.
Sterling took a hit amid the prospect of more QE, or cash stimulus, dropping to one month lows against the dollar and euro.
The euro traded at 85.54 pence, up from 85.16 pence.
Elsewhere, the European single currency slid to $1.2864 from $1.2906 on Tuesday.
RBS shares rose 2.2% at 349.6 pence and LBG grew 2.3% to 62.96 pence.
Bank of England Governor Mervyn King again voted unsuccessfully for Britain’s economy to be pumped with more fresh cash, minutes of the BoE’s last monetary policy meeting revealed yesterday. Bank of England Governor Mervyn King again voted unsuccessfully for Britain’s economy to be pumped with more fresh cash, minutes of the BoE’s last monetary policy meeting revealed yesterday.
King was joined again by fellow MPC members David Miles and Paul Fisher in calling for an extra £25bn in QE stimulus.