(MENAFN– ecpulse)
European stocks rallied Thursday, tracking gains in global markets after Federal Reserve Chairman Ben Bernanke played down chances of imminent stimulus withdrawal.
- STOXX Europe 600 gained 0.89 percent or 2.62 points to 297.46
- Euro Stoxx 50 rose 1.27 percent or 33.87 points to 2,693.58
Stocks opened higher in Europe, buoyed by dovish comments from the Federal Reserve President Ben Bernanke, while minutes of the Fed’s latest monetary policy meeting showed many members wanted to see further job gains before pulling back bond purchases.
Speaking at a conference sponsored by the National Bureau of Economic Research, Bernanke said the central bank will likely maintain its highly accommodative monetary policy for the foreseeable future amid high unemployment rate and low inflation.
Minutes from the Fed’s June policy meeting revealed lack of agreement in 19-member Federal Open Market Committee, where about half of the bank`s policymakers felt the stimulus program should be scaled back by year-end. However, many wanted reassurance the U.S. jobs recovery was on solid ground before withdrawing economic stimulus.
- France`s CAC 40 went up 1.15% to 3,884.70
- German DAX edged 1.30 % up to 8,171.15
- British FTSE 100 inched 1.10% higher to 6,576.35
Asian stocks are broadly higher, with the regional benchmark index on course for its highest close in a month, after Bernanke signaled no quick end to easy-money policies, while markets in Japan underperformed the region after the Bank of Japan made no changes to its monetary easing policy at the conclusion of its two-day policy meeting Thursday.
In a widely-expected move, the Bank of Japan (BoJ) kept monetary policy steady at the conclusion of its two-day meeting on Thursday, but raised its assessment of the economy today, referring to a recovery for the first time since before a record 2011 earthquake.
Elsewhere, the Bank of Korea held its interest rate unchanged for a second straight month, a move widely expected by markets. BOK decided to set the rate at 2.5% for a second month to meet analysts’ expectations and unchanged from a previous reading.
Furthermore, Deutsche Bank AG, Germany’s largest bank was able to lend firms from Brazil to Italy while making the transactions disappear from its balance sheet by offsetting them with equivalent liabilities in a way that obscured their continuing risk to investors.
According to internal documents provided to Bloomberg News, deals totaling 2.5 billion euros ($3.3 billion) involving Italy’s Banca Monte dei Paschi di Siena SpA and Banco do Brasil SA were among 395.5 billion euros in assets that Deutsche Bank excludes from its balance sheet. The total represents 19 percent of the company’s reported assets of 2.03 trillion euros.
- As of 03:44 ET, Deutsche Bank AG share rose 0.425 points or 1.28 percent to 33.680 euro
In other news, markets will watch Italy as it holds another bond auction later in the day, while the European Central Bank is due to release its monthly bulletin for its July meeting. In UK, Chancellor George Osborne will testify before government lawmakers on 2015-16 budget plans.
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