Euro­pean shares climb to 2-week high as Fed­eral Re­serve leaves in­ter­est rates un­changed

Malta Independent - - FI­NAN­CIAL -

Yes­ter­day Euro­pean shares climbed to a two-week high, boosted by a rally in min­ing eq­ui­ties, af­ter the US Fed­eral Re­serve left in­ter­est rates un­changed and pro­jected a less ag­gres­sive path for hikes next year and in 2018.

The Fed, how­ever, sig­naled it could still tighten mone­tary pol­icy by the end of this year as the labour mar­ket im­proved fur­ther. Fed Chair Janet Yellen said US growth was look­ing stronger and rate in­creases would be needed to keep the econ­omy from over­heat­ing and fu­el­ing high in­fla­tion.

The pan-Euro­pean STOXX 600 in­dex rose for a sec­ond straight ses­sion and was up 0.7 per­cent by 0748 GMT af­ter touch­ing its high­est level in two weeks. How­ever, the in­dex is still down around 6 per­cent so far this year.

Min­ers led the Euro­pean stock mar­ket higher as the Fed's de­ci­sion to keep rates un­changed pushed down the US dol­lar on cur­rency mar­kets, thereby mak­ing com­modi­ties cheaper for hold­ers of other cur­ren­cies.

The STOXX Europe 600 Ba­sic Re­sources in­dex rose 2.8 per­cent to its high­est level since the mid­dle of Au­gust. Shares in BHP Bil­li­ton, An­glo Amer­i­can, Rio Tinto and Fres­nillo were up 2.7 to 3.4 per­cent.

En­ergy shares were also in de­mand af­ter oil prices also rose on a weaker dol­lar, ex­tend­ing gains from the pre­vi­ous ses­sion when a sur­prise third con­sec­u­tive weekly US crude in­ven­tory draw tight­ened sup­ply.

Asian stocks out­side Ja­pan rose for a sixth day af­ter the Fed­eral Re­serve re­frained from rais­ing US in­ter­est rates and scaled back ex­pec­ta­tions for in­creases in 2017, buoy­ing de­mand for riskier as­sets. The MSCI Asia Pa­cific Ex­clud­ing Ja­pan In­dex climbed 1 per­cent to 454.65 as of 4:01 p.m. in Hong Kong, head­ing for the high­est close since the 9 Septem­ber. Fed of­fi­cials said the case for higher in­ter­est rates has strength­ened, but they had de­cided “to wait for fur­ther ev­i­dence of con­tin­ued progress” to­ward the cen­tral bank’s ob­jec­tives.

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