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European stocks advanced for the first time in three days as Federal Reserve chairman nominee Janet Yellen said the U.S. economy must improve before monetary stimulus is pared. U.S. index futures and Asian shares climbed.
The Stoxx Europe 600 Index gained 0.6 percent to 321.8 at 10:36 a.m. in London. The gauge has rallied for the past five weeks as the Fed maintained the pace of its bond purchases and the European Central Bank lowered its key interest rate.
“Yellen’s comments are well timed as investors are nervous about tapering,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said by phone. “There is a lot of noise at the moment and not much news, but right now the noise is supportive.”
Yellen said the economy and labor market are performing “far short of their potential” and must improve before the central bank can begin reducing monetary stimulus.
“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” Yellen, the Fed’s current vice chairman, said in testimony prepared for her nomination hearing before the Senate Banking Committee. “I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”
Gross domestic product in the 17-nation euro area rose 0.1 percent in the three months through September, down from a 0.3 percent expansion in the second quarter, the European Union’s statistics office in Luxembourg said today. That’s in line with the median forecast of 41.
Bouygues (EN) jumped 6.4 percent to 29.56 euros. The French building and telecommunications company said third-quarter current operating profit rose to 542 million euros ($728 million) from 478 million euros a year earlier. Analysts had forecast 465 million euros, according to the average of four estimates.
K+S gained 5.3 percent to 21.64 euros after reporting third-quarter operating earnings of 115.8 million euros. The median forecast of analysts in a survey was for 106.5 million euros. Europe’s biggest producer of potash also said it plans to make 500 million euros in savings over the next three years to raise its competitiveness and counter weak potassium and potash markets.
Zurich Insurance Group AG (ZURN) advanced 2.2 percent to 257.7 euros after it said third-quarter profit rose 64 percent, beating analysts’ estimates. Net income jumped to $1.1 billion from $672 million a year ago, Switzerland’s biggest insurer said in a statement. That beat the $993.5 million average estimate of analysts.
FTSE 100 6,661.9 +31.90 +0.48%
CAC 40 4,260.45 +20.51 +0.48%
DAX 9,118.15 +63.32 +0.70%
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