European shares surge after Fed reaffirms easy policy stance
LONDON, July 11
LONDON, July 11 (Reuters) - European shares rose on Thursday, led by growth-sensitive stocks after the chairman of the U.S. Federal Reserve outlined his vision for continued monetary accommodation in the near-term.
The pan-European FTSEurofirst 300 rose 0.9 percent to 1,120.38, its highest level in a month and a half, after Ben Bernanke said that a "highly accommodative policy is needed for the foreseeable future" in response to questions on Wednesday evening.
His words spurred risk assets after a mixed market reaction to the initial release of the Fed meeting's minutes. Basic resources, sensitive to sentiment towards the economy, were the top sectoral gainers, up 2.8 percent.
"It was took the Q&A for us to get the clear signal from Bernanke that he thought more stimulus is needed," Ioan Smith, managing director at KCG Europe, said.
"My base case was always that the market had got ahead of itself in terms of pricing in how soon tapering was going to occur," adding that the words 'foreseeable future' were the key in tempering expectations for an early withdrawal of stimulus.
The Euro STOXX 50 surged up 1.3 percent to 2,694.84, well above the June 19 close at 2,684 just before the Fed confirmed it was looking to slow asset purchases by the end of the year, sending shares sharply lower in the following days.