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London - European stocks resumed an advance that had halted yesterday, after minutes from the Federal Reserve’s last meeting reassured investors the world’s biggest economy can withstand higher borrowing costs.
Optimism over global growth prospects sent all industry groups in Europe higher, with commodity producers leading gains. The Stoxx Europe 600 Index rose 0.9% at 14:13, its third gain in four days pushing the benchmark toward its highest level since August.
Fed officials signaled their faith in the strength of the world’s biggest economy, saying it may “become appropriate” to raise the benchmark lending rate next month. They largely agreed that any tightening would be gradual.
“The notion that rates can actually rise gives us some hope that the worst of the crisis is behind us and we can start to think about a return to normality,” said Peter Dixon, a global equities economist at Commerzbank AG in London.
“In that sense a rate hike is probably welcome. Markets have calmed down and have gotten used to the fact that a change in monetary policy is coming. There’s also a sense that investors were reassured that the pace of any increases will be slow.”
The Stoxx 600 has jumped 13% since a summer rout over global economic concern sent the benchmark to a seven-month low in September. Miners were among the sectors most hurt amid a slowdown in China, the biggest consumer of commodities. Glencore Plc and ArcelorMittal added more than 3.7% today.
Germany’s DAX Index gained 1.6%, among the best performers in western Europe. ThyssenKrupp AG rose 2.9% after profit increased and the steelmaker proposed to boost its dividend.
Among other stocks active on corporate news, BG Group gained 2.5% after Australia’s competition watchdog cleared Royal Dutch Shell Plc’s $70bn deal to buy it. Shell added 2.6%.
Sodexo, Royal Mail, Johnson Matthey and NN Group NV rallied after updates on cost saving measures. Sodexo and Royal Mail advanced 5% after also posting better-than- forecast earnings, while Johnson Matthey surged 9.5% after announcing a special dividend. Insurer NN Group climbed 4.1% after its solvency ratio improved.
National Bank of Greece SA and Piraeus Bank SA each tumbled 27% after the European Central Bank lowered its ceiling for emergency assistance to the country’s lenders. The ASE Index declined 0.7% for the worst performance among developed markets.
