Stocks in Europe rallied Thursday, following U.S. markets
higher, as investors welcomed the message from the Federal Reserve
that it will be patient in deciding when next to raise interest
rates.
The Stoxx Europe 600 index was 1.3% higher in early trade,
spurred by a 2.0% surge for the S&P 500 on Wednesday after Fed
Chairwoman Janet Yellen broached the prospect of "beginning to
normalize" monetary policy.
Despite the hint that rate hikes could be on the way next year,
investors were reassured by the Fed's cautious language.
"The shift is a signal of confidence in the sustainability of
the U.S. recovery," said Ian Williams, economist and strategist at
brokerage Peel Hunt.
European stocks extended the rebound that began late in
Wednesday's session, boosted by a recovery in oil prices.
Brent crude added to those gains on Thursday, rising 0.2% to
$61.35 a barrel.
The Russian ruble, too, found further respite from its plunge in
recent days. The currency had began to recover on Wednesday as the
market welcomed measures by the Bank of Russia to shore up the
country's banks.
It climbed another 1.5% against the dollar to trade at
61.58.
Against major currencies, Ms. Yellen's message gave the dollar
boost, though just a one against the yen, shedding 0.2% against the
Japanese currency to trade at Yen118.58. The euro touched a 10-day
low against the dollar.
The Swiss franc tumbled after the Swiss National Bank surprised
investors by pushing interest rates into negative territory. The
SNB's policy of capping the level of the franc has come under
pressure with the recent weakening of the euro, pressuring the
Swiss central bank to mimic the European Central Bank's policy of
paying negative rates on deposits.
The franc fell back from the SNB's cap of 1.20 to the euro by
0.4%, trading at 1.2053.
"Price action over the last few days suggests the SNB might have
had to purchase material amounts of euros to defend the 1.20 floor
and this may have triggered the move today," said Beat
Siegenthaler, a currency strategist at UBS.
Elsewhere, Greek markets showed little reaction to the
government's failure to win enough support in the first round of
parliamentary voting for a new president on Wednesday, a move that
could force the country into snap elections.
Athens' main stock index was down 0.3%. The country's 10-year
bond yield was a touch lower at 8.65%.
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