European stock markets climb on Fed, miners| MENAFN.COM

Wednesday, 01 February 2023 02:51 GMT

European stock markets climb on Fed, miners

(MENAFN- AFP) Europe's major stock markets advanced Friday after gains across Asia thanks to growing hints that US interest rates will not rise until next year.

Shares in mining companies meanwhile surged after an announcement from Glencore that it will slash zinc production.

The Federal Reserve postponed a move to hike US interest rates as it was worried about a global slowdown, concerns over the strong dollar and listless US inflation, minutes from its last monetary policy meeting revealed Thursday.

European indices made ground "thanks to another positive US close which spilled over into Asia, extending recent gains as investors add to risky bets on expectations of prolonged easy monetary policy", said Mike van Dulken, head of research at trading group Accendo Markets.

Fed policymakers at their September meeting mulled an increase in the zero-level US federal funds rate but took a cautious approach after a severe bout of financial turmoil unsettled the outlook for the world's biggest economy, the minutes showed.

London's benchmark FTSE 100 index climbed 0.65 percent to stand at 6.416,16 points, boosted by mining giant Glencore's seven percent jump.

In the eurozone Friday, the Paris CAC 40 won 0.54 percent to trade at 4,701.39 points compared with Thursday's close.

Frankfurt's DAX 30 stocks index rallied 1.04 percent to 10,096.60 points, with troubled Volkswagen's shares soaring to close up 8.35 percent at 125.90 euros

The German auto giant, which has seen over 25 billion euros in market capitalisation wiped out in two weeks, has been engulfed in a massive global pollution cheating scandal involving 11 million of its diesel vehicles.

Friday's share jump sparked speculation over a "mystery" buyer snapping up the shares. Daily Bild cited market rumours that the Porsche and Piech families -- both major shareholders of Volkswagen group -- were in the market to buy.

The euro climbed to $1.1362 from $1.1275, with the Fed seemingly not rushing to hike US borrowing costs before the end of the year.

"Rate-setters from the UK to Europe to the US have voiced concerns over the slowdown in emerging markets and the drop in commodity prices," Jasper Lawler, analyst at CMC Markets UK, wrote in a client note Friday.

- Glencore shares shine -

Mining and commodities giant Glencore, weighed down by debt as it struggles against a commodity price crash, announced Friday it is slashing its worldwide output of zinc by one third.

The Swiss-based company said jobs would be lost.

Glencore shares surged 7.0 percent to close at 129.1 pence, while rivals Anglo American jumped 7.23 percent and Rio Tinto won 3.15 percent.

"A zinc output cut from Glencore drove metal prices higher while dovish Fed minutes caused a drop in the dollar, increasing the value of commodities," said Lawler.

In Asia, stock markets extended a run of gains as confidence returns to trading floors, with most regional exchanges more than one percent higher.

Tokyo jumped 1.64 percent , Sydney ended 1.33 percent higher, while Shanghai climbed 1.27 percent and Hong Kong gained 0.46 percent.

US stocks, which shot up Thursday after the minutes of the Fed meeting were released, rose slightly on Friday.

Near mid-day in New York, the Dow Jones Industrial Average was at 17,067.05 points, a gain of 0.10 percent.

The broad-based S&P 500 added 0.12 percent to 2,015.83, while the tech-rich Nasdaq Composite Index gained 0.40 percent to 4,830.06.

However, shares of Alcoa were off more than four percent after it reported after markets closed Thursday a 70.4 percent drop in third-quarter earnings to $44 million. The metals giant trimmed its outlook for key Chinese businesses.

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