Sun, Mar 18, 2012 - Page 10 News List

European markets post advance as outlook improves


European stocks posted their biggest weekly rally since early last month as reports from the US to Germany indicated growth is gaining pace and the US Federal Reserve raised its assessment of the world’s biggest economy.

The STOXX 600 Europe Index climbed 2.6 percent to 272.40 during the week. The measure has rallied 11 percent this year on optimism the eurozone will contain the sovereign-debt crisis and as US economic reports beat forecasts.

“The US economy is a very, very strong support for the market,” said Pierre Mouton, a fund manager at Notz Stucki & Cie in Geneva. “The data is confirming that the economy really is rebounding and more rapidly than expected. We’ve turned the page.”

The mean daily volume of shares changing hands on the STOXX 600 this week was 8.6 percent higher than the average in the last 12 months, according to data compiled by Bloomberg.

The VSTOXX Index, which measures the cost of option prices on the Euro STOXX 50 index, slid 4.3 percent to 18.52 on Friday, its lowest level since April last year.

Strains in global financial markets have eased and the US labor market is gathering strength, the US Federal Open Market Committee said on Tuesday.

At the same time, the unemployment rate is “elevated” and “significant downside risks” remain, it said. Fed Chairman Ben Bernanke is sticking to his plan to the keep benchmark interest rate close to zero through at least 2014.

National benchmark indices rose in all of Europe’s 18 western markets except Portugal. France’s CAC 40 Index jumped 3.1 percent, the UK’s FTSE 100 Index added 1.3 percent, while Germany’s DAX rallied 4 percent.

Finance ministers from the 17 nations that use the euro approved the 130 billion euro (US$171 billion) second bailout package for Greece, at their meeting in Brussels on Monday. The agreement capped months of grueling negotiations between Greece, the IMF and eurozone authorities.

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