Sun, Jan 06, 2019 - Page 14 News List

Europe’s markets surge as Fed drops rate hike course


European stocks on Friday shot higher after the head of the US Federal Reserve signaled that it was no longer set on raising interest rates.

The US central bank has no “preset” plan for interest rates and would bide its time to see how the US economy evolves before making any moves, Fed Chairman Jerome Powell said.

The comments signaled a major shift from the Fed’s previous indications that it would continue hiking interest rates, with Powell saying that financial markets were worried about a slowdown in the US and Chinese economies.

The Fed is “prepared to adjust policy quickly and flexibly” to support the economy, Powell said.

The comments sent European stock indices sharply higher after they had already posted gains on data showing that, at least in terms of job creation, the US economy continues to be healthy.

“A solid set of job numbers and some comfortable words from the chairman of the Federal Reserve have been just the ticket to get markets into bullish mode,” IG Group PLC chief market analyst Chris Beauchamp said.

Germany’s DAX on Friday surged 351.03 points, or 3.4 percent, at 10,767.69, rising nearly 2 percent from a close of 10,558.96 on Dec. 28.

In France, the CAC 40 on Friday jumped 125.64 points, or 2.7 percent, to 4,737.12, a gain of 1.2 percent from 4,678.74 a week earlier.

London’s FTSE 100 on Friday rose 144.76 points, or 2.1 percent, to 6,837.42, up 1.5 percent from a close of 6,733.97 on Dec. 28.

Meanwhile, the pan-European STOXX 600 on Friday gained 9.46 points, or 2.8 percent, to 343.38, climbing 2.1 percent from 336.23 a week earlier.

Additional reporting by staff writer

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