By Tommy Stubbington
Stocks in Europe rallied Thursday, as investors welcomed the
message from the Federal Reserve that it will be patient in
deciding when next to raise interest rates and oil prices continued
to recover.
The Stoxx Europe 600 index was 1.8% higher midmorning, 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 increases 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.
U.S. stock futures pointed to a further 1.0% gain for the
S&P at Thursday's open. Changes in futures aren't necessarily
reflected in market moves after the opening bell.
In Europe, stocks extended the rebound that began late in
Wednesday's session, boosted by a recovery in oil prices.
The move accelerated Thursday, with Brent crude 2.7% higher at
$62.67 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 0.7% against the dollar to trade at
62.06.
Against major currencies, Ms. Yellen's message gave the dollar a
boost, pushing it to a 10-day high against the euro.
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
0.3%, trading at 1.2042.
"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 stocks fell following 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 2.0%.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
Access Investor Kit for Schweizerische Nationalbank
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CH0001319265