Traders are pictured at their desks in front of the DAX board at the Frankfurt Stock Exchange. The DAX 30 index yesterday shot up 1.04% to 11,327.19 points, boosted by more positive German economic data.
AFP/London
European stocks pushed higher yesterday, with London’s benchmark FTSE 100 index and Frankfurt’s DAX 30 index hitting record high closing levels as chances of a quick US interest rate hike recede.
The FTSE 100 rose 0.21% to 6,949.73 points, beating by a whisker the level set Tuesday when it broke a 15-year record.
Meanwhile the DAX 30 index shot up 1.04% to 11,327.19 points, boosted by more positive German economic data, and in Paris the CAC 40 climbed 0.58% to 4,910.62 points.
Milan gained 1.04% and Madrid rose 0.81%.
While there was some positive data and company results in Europe on Thursday to push up the markets “...it’s the fact US interest rates aren’t going anywhere fast that really counted,” said TrustNet analyst Tony Cross.
“Today’s news of negative inflation across the Atlantic means that monetary policy isn’t going to tighten any time soon and equities can continue to climb in the wake of this,” he added.
US Federal Reserve chair Janet Yellen also hinted in testimony to US lawmakers this week the central bank was in no hurry to raise interest rates.
Yet in foreign exchange activity, the euro dropped to $1.1217 from $1.1360 late in New York on Wednesday, which analysts put down to US data showing a rise in orders of durable goods.
The lower euro also helped prop up European shares, according to analysts.
The British banking sector was in focus after RBS posted new huge losses and Standard Chartered unveiled a boardroom shake-up.
Shares in Royal Bank of Scotland (RBS) sank 4.14% to 386.60 pence after the state-rescued lender said it will end investment banking in the Middle East and Africa and “significantly” reduce its presence in Asia and the US after a seventh-straight annual loss.
RBS, about 80% owned by the British government, said losses after tax totalled £3.47bn ($5.40bn, €4.74bn) last year following a £4.0bn write-down on the retail bank Citizens, part of its US operations.
“There is little doubt that RBS is making progress, with the shares having received some encouragement from the market over the last year, rising 11% as compared to a 1.5% improvement for the wider FTSE 100,” noted Richard J Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
“Even so, with the finished product still some way off and no dividend to encourage investment in the meantime, the general consensus of the shares as a sell is likely to remain intact for now,” he said in a note to clients.
Elsewhere, Standard Chartered shares climbed 5.37% to 976 pence after the Asia-focused bank announced a boardroom shake-up.
Chief executive Peter Sands will step down in June following poor results, job cuts and fines for failing to detect possible money-laundering, and will be replaced by JPMorgan investment bank’s former co-CEO Bill Winters.
The emerging markets lender added that chairman John Peace will leave during the course of next year, allowing time for Winters to settle into his new role.
Frankfurt shares got a boost after data showed unemployment in Germany fell in February to the lowest level since reunification in 1990 as growth in Europe’s biggest economy picks up, official data showed.
Also yesterday the GfK market research institute calculated that German consumer confidence surged to its highest level in more than 13 years.
ING DiBa economist Carsten Brzeski said the German labour market “is continuing its success story, providing further evidence of strengthening domestic demand.”
