By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Germany's DAX 30 benchmark traded at a
record and a broad Europe benchmark was on track for its highest
close in more than five years Thursday after the U.S. Federal
Reserve, in a surprise move, didn't announce a cut in its monthly
asset purchases.
The Stoxx Europe 600 index gained 0.5% to 314.79, while
Germany's DAX 30 index added 0.5% to 8,675.20, trading at an
all-time high.
The U.K.'s FTSE 100 index added 1.1% to 6,633.09 and France's
CAC 40 index climbed 0.6% to 4,193.58.
U.S. stocks traded mostly higher after closing at record highs
on Wednesday.
The solid gains came after the U.S. Fed late Wednesday abstained
from reducing its $85-billion-a-month asset purchases and said it
would wait for more evidence of economic progress. The central bank
cited rising mortgage rates and reduced federal spending as
headwinds that "could slow the pace of improvement in the
economy."
"This move by the Fed comes as a shock to investors who had
positioned themselves and effectively accepted that Chairman
Bernanke would start the reduction," said Alex Conroy, financial
sales trader at Spreadex, in a note.
Fed Chairman Ben Bernanke said that the central bank might still
scale back its bond buys before the end of the year, but that it
will depend on whether growth and the pace of hiring show greater
strength.
The decision to postpone the taper also boosted gold and silver
prices, triggering a rally for Europe's precious miners. Polymetal
International PLC surged 9.3%, Randgold Resources Ltd. jumped 7.6%
and Fresnillo PLC gained 5.8%.
Banks also gained, with Intesa Sanpaolo SpA up 3.6% in Milan,
Standard Chartered PLC climbing 3.7% in London and Deutsche Bank AG
(DB) ticking 1.1% higher in Frankfurt.
Among other notable movers in Europe on Thursday, shares of
Roche Holding AG gained 0.7%. A report in Dealreporter said the
Swiss drug maker was eyeing a takeover of U.S.-listed BioMarin
Pharmaceutical Inc. (BMRN). A representative from Roche declined to
comment on the report, while BioMarin wasn't immediately available
for comments.
Also in Zurich, shares of Cie. Financière Richemont SA rose 2.1%
and Swatch Group AG picked up 1.5% after data showed Swiss watch
exports rose 0.5% in August.
Shares of Scania AB climbed 3.1% after the Swedish truck maker
said it didn't see the normal seasonal downturn in European order
bookings in July and August.
Shares of Airbus-parent European Aeronautic Defence & Space
Co. added 1.8% in Paris after Deutsche Lufthansa AG said it will
order 59 long-range jetliners from Airbus and Boeing Co. (BA).
Lufthansa shares were down 0.4%.
The broader markets shook off downbeat retail data from the
U.K., showing sales dropped 0.9% in August after a solid 1.1% rise
in July.
Meanwhile, a monthly survey from the Confederation of British
Industry showed U.K. manufacturers are the most upbeat in 18
years.
The data calendar was heavy in the U.S., starting with jobless
claims showing 309,000 Americans filed for jobless claims last
week, which beat analysts expectations.
The Philadelphia Fed's manufacturing index jumped to a reading
of 22.3 in September from 9.3 in August, while the leading economic
index for the U.S. rose 0.7% in August to 96.6.
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