Europe stocks move firmly higher on Yellen comments

Dow Jones/London

Germany’s DAX 30 index reclaimed the 10,000 level yesterday as European stock markets moved firmly higher after US Federal Reserve Chairwoman Janet Yellen signalled she was in no hurry to raise interest rates.

The Stoxx Europe 600 index gained 0.6% to close at 348.15, after moving in a tight range most of the week.

The DAX 30 index climbed back above the 10,000 mark for the first time since June 11, gaining 0.7% on the day to close at 10,004.00. The UK’s FTSE 100 index advanced 0.4% to 6,808.11, while France’s CAC 40 index climbed 0.7% to 4,563.04.

The solid moves came after US Fed chief Janet Yellen late on Wednesday said there would be “considerable time” between when the bond taper ends and when rate increases begin. She also said the central bank wasn’t concerned about the stock market currently trading around record highs.

Yellen’s comments also weakened the dollar and boosted metals prices. UK miners climbed on the back of stronger metals prices yesterday, with shares of Anglo American up 1% and BHP Billiton 1% higher.

Among other notable movers, Rolls-Royce Holdings climbed to the top of the pan-European index. The engine maker rallied 8.1% after it announced a £1bn ($1.7bn) stock-buyback programme and ruled out any major takeovers.

Man Group jumped 6% after the asset manager said it is buying Boston-based investment firm Numeric Holdings for up to $494mn.

Shares of Portugal Telecom SGPS picked up 1.1% after Moody’s Investors Service lifted the company’s rating to Baa3, or investment grade, from Ba2 to reflect “the company’s stronger global diversification and greater financial strength all owing to its merger with Oi SA.”

Among decliners, shares of Alstom tanked 6% after General Electric revised its offer for the French conglomerate’s energy business, which would create three new joint ventures.

Shares of Hennes & Mauritz slipped 0.5% after Deutsche Bank cut the Swedish fashion retailer to hold from buy, with the analysts saying shares currently trade at “full price.”

Shares of Air France-KLM gave up 3.5% after UBS slashed its rating on the airline to sell from neutral, saying a number of factors that are beyond the company’s control will weigh on its results. UBS mentioned the recent spike in oil prices, due to sectarian violence in Iraq, as one of the issues.

Eurozone finance ministers gathered in Luxembourg for a Eurogroup meeting, with Greece-among other things on the agenda. The International Monetary Fund, one of Greece’s international lenders, warned last week the country needs to improve its public-sector efficiency dramatically, to meet new fiscal targets and avoid fresh austerity measures. The IMF also identified a €12.6bn ($17bn) gap in funding.