Traders working on the floor at the New York Stock Exchange yesterday.
LONDON: European shares advanced yesterday on unexpectedly positive US jobs data and more expected testimony from US Federal Reserve chief Ben Bernanke that he had no preset plans to wind down stimulus.
“The improved weekly jobless claims data out of the US appears to have been the catalyst for this push higher, with markets keeping a close ear on events in Washington and the second day of Bernanke’s testimony,” said Michael Hewson, Senior Market Analyst at CMC Markets UK.
At close, London’s FTSE 100 index of leading shares was up 0.95 percent to end at 6,634.36 points. Frankfurt’s DAX 30 gained 1.00 percent to 8,337.09 points and in Paris the CAC 40 jumped 1.44 percent to 3,972.79 points.
On the foreign exchange market, the European single currency dropped to $1.3083 from $1.3123 late in New York on Wednesday.
And the price of gold firmed to $1,283.25 an ounce on the London Bullion Market, from $1,297.25 on Wednesday.
In the US, the world’s biggest economy, fewer people filed new claims for unemployment insurance benefits last week as the job market slowly improved, government data showed.
Initial jobless claims fell to 334,000 in the week ending July 13, when most analysts expected a smaller decline to 348,000.
The US Fed has made the reduction of high unemployment, which stood at 7.6 percent for the second month in a row in June, an overarching goal of its big stimulus programme.
And in the first of his two days of testimony to Congress, Bernanke told representatives on Wednesday that the vast bond-buying programme — known as quantitative easing — would remain in place until the Fed is happy the economy can stand on its own two feet.
“I emphasise that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Bernanke told lawmakers. Bernanke is due to be grilled by Senators later.
At midday in the US, the Dow Jones Industrial Average rose 0.73 percent, while the tech-rich Nasdaq Composite Index was virtually unchanged. Bernanke said the economy was expanding at a moderate pace and showed solid signs of strength in various areas, a view supported by the Fed’s Beige Book report, which was also released on Wednesday.
Chris Beauchamp of investment bank IG said: “Investors can hardly be blamed for throwing themselves in the general direction of an economy that is showing real signs of health, especially when viewed against the moribund economies of Western Europe.
In company news, shares in the London Stock Exchange Group (LSEG) soared to the top of the FTSE 100 index on an impressive first-quarter trading update.
LSEG shares jumped 7.43 percent to 1,564 pence after news that revenues rallied 39 percent in the first quarter of its financial year, or three months to June, compared with the same period a year earlier.
In Paris, shares in struggling French automaker PSA Peugeot Citroen rose by 6.94 percent to ¤8.50 after analysts at HSBC bank recommended the stock.
On the Frankfurt exchange, shares in German software giant SAP fell 1.11 percent to ¤57.03 after it trimmed its full-year sales forecast in the face of the “difficult macroeconomic environment” in Asia and Japan.
AFP
