European stock markets rallied on Tuesday following gains elsewhere that were triggered by Federal Reserve Chair Janet Yellen expressing confidence in the US economy despite poor jobs data.
Euro zone markets, including Frankfurt, Paris, Madrid and Milan, shot higher also as official data showed economic growth in the single currency bloc was revised higher.
London’s main stocks index meanwhile climbed at a slower pace compared with its eurozone rivals. Royal Dutch Shell topped the London leaderboard, its shares winning almost 3.0 percent in morning deals, after the energy giant forecast bigger-than-expected savings following a recent huge takeover of smaller rival BG Group.
On foreign exchange, the British pound rebounded, a day after falling to around three-week low points on an uncertain outcome to the June 23 referendum on Britain’s EU membership. Around 0930 GMT, London’s benchmark FTSE 100 index was 0.7-percent higher compared with Monday’s close.
Frankfurt jumped 1.9 percent, Paris won 1.4 percent, Milan surged 2.0 percent and Madrid gained 1.1 percent.
“Equity indices are handsomely in the green as risk appetite and momentum build,” said Mike van Dulken, head of research at Accendo Markets.
Official EU data Tuesday showed growth in the eurozone strengthened to a revised 0.6 percent in the first quarter of 2016, a sign that the sluggish economy in Europe may be improving. The Eurostat statistics agency said growth in the 19-nation single currency bloc accelerated in January to March at a slightly greater pace than the previous estimate 0.5 percent. Industrial production in Germany, Europe’s biggest economy, meanwhile rose in April, separate figures revealed.
Markus Huber, a trader at City of London Markets, noted that wider European stocks were “receiving a boost from firmer markets across Asia on the back of a speech by Fed chief Janet Yellen yesterday.”
“While Yellen indirectly confirmed that there won’t be a rate hike in June, she also sounded confident that the US economy remains strong despite a disappointing US non-farm payrolls report last Friday,” he said.
Yellen’s comments boosted also Wall Street on Monday, with the S&P 500 stocks index reaching a seven-month high following a 0.5-percent gain.
She helped markets tentatively put last Friday’s surprisingly dismal US jobs report behind them, saying one month’s data is not so significant and that the overall jobs market situation has been “quite positive.”
Source: Arab News