Global stock markets posted gains yesterday as oil prices rose and after US Federal Reserve chief Janet Yellen expressed confidence in the US economy despite poor jobs data.
Eurozone markets also received a shot in the arm from an upward revision in economic growth in the single currency bloc.
US shares rose as higher oil prices lifted petroleum-linked shares.
“Domestic stocks continue to rebound, with the energy sector rising as crude oil prices are extending their recent rally, while global optimism is emanating from yesterday’s speech from Fed Chair Janet Yellen,” analysts Charles Schwab said in an investors’ note.
“European equities are higher following upbeat data and eased Brexit concerns,” it added.
On foreign exchange, the British pound rebounded a day after falling to around three-week lows on an uncertain outcome to the June 23 referendum on Britain’s EU membership.
Oil prices rose, with Brent reaching a near eight-month high on unrest in Africa’s biggest crude producer Nigeria, as well as dollar weakness.
At around 1600 GMT, the benchmark oil Brent North Sea crude for delivery in August was $51.04 a barrel.
London’s FTSE 100 index finished 0.2% higher compared with Monday’s close. Royal Dutch Shell closed more than 3% higher in London after the energy giant forecast bigger-than-expected savings following a recent huge takeover of smaller rival BG Group.
Frankfurt meanwhile closed 1.7% up and Paris gained 1.2%.
Official EU data yesterday showed growth in the eurozone strengthened to a revised 0.6% in the first quarter of 2016, a sign that the sluggish economy in Europe may be improving.
The Eurostat statistics agency said growth in the 19-nation single currency bloc accelerated in January to March at a slightly greater pace than the previous 0.5% estimate.
Industrial production in Germany, Europe’s biggest economy, meanwhile rose in April, separate figures showed.
Markus Huber, a trader at City of London Markets, noted that wider European stocks were “receiving a boost from firmer markets across Asia on the back of a speech by Fed chief Janet Yellen yesterday”.
“While Yellen indirectly confirmed that there won’t be a rate hike in June, she also sounded confident that the US economy remains strong despite a disappointing US non-farm payrolls report last Friday,” he said.
She helped markets tentatively put the surprisingly dismal US jobs report behind them, saying one month’s data is not so significant and that the overall jobs market situation has been “quite positive”.But Yellen backed away from previous Fed hints for a rate increase in June or July, only saying that tighter monetary policy should come gradually.
Asian stock markets rose for a third straight trading day yesterday, while the dollar’s relative weakness helped support oil prices.
In London, the FTSE 100 up 0.2% at 6,284.53 points; Frankfurt - DAX 30 up 1.65% at 10,287.68 points and Paris - CAC 40 up 1.2% at 4,475.86 points at the close yesterday.
Royal Dutch Shell headquarters is seen in The Hague. The oil major’s shares closed up more than 3% in London yesterday.
