European Equities Climb on Fed Hopes
European stock markets rose Thursday after strong gains in Asia and overnight on Wall Street, on hopes that the U.S. Federal Reserve could soon unveil new economy-boosting plans, dealers said.
In midday trade, London's FTSE 100 index of leading shares added 0.11 percent to 5,211.49 points, Frankfurt's DAX 30 index gained 0.80 percent to 5,726.65 points and in Paris the CAC 40 was up 0.87 percent to 3,166.99 points.
Asian indices jumped Thursday on the eve of a key speech by Fed chief Ben Bernanke that many analysts hope could outline fresh plans to kick start the ailing U.S. economy.
"The market is awash with speculation and hope that Bernanke may announce or give an indication towards an impending form of Quantitative Easing to help stimulate the U.S. economy and avoid it slipping back into recession," said City Index analyst Joshua Raymond.
Hong Kong rallied 1.47 percent and Tokyo 1.54 percent after New York soared overnight following an upbeat report on U.S. durable goods orders, dealers said.
Some tech stocks were higher after the resignation of Apple chief executive Steve Jobs on the hope they might benefit if the U.S. giant falters but broader market themes such as currencies and debt dominated sentiment.
Investors digested a barrage of company earnings news from the likes of British brewing giant Diageo, Austria's Raiffeisen Bank and French lender Credit Agricole.
European shares also gained ground after Wall Street rose 1.2 percent, gaining for the third straight day on Wednesday on the news that US durable goods jumped 4.0 percent in July from June.
"After the release of some better-than-expected economic data in the U.S. ... Wall Street managed to move higher once again as investors found another bout of optimism," said IG Markets analyst Cameron Peacock.
At the same time, investors are on tenterhooks before Friday's publication of the latest estimates of second-quarter economic growth in both Britain and the United States, Peacock added.
"The key questions remain -- what will the GDP readings look like ... and will Ben Bernanke serve up another stimulus package that has arguably already been priced into equities from the gains at the start of the week?" he said.
Bernanke is set to give a speech on Friday which will be closely watched for signs of whether he endorses a further loosening of monetary policy.
Last year, at the same annual central bankers' conference in Jackson Hole, Wyoming, Bernanke hinted that the Fed might launch a second round of Quantitative Easing -- essentially, injecting fresh money into the economy in a bid to pump up growth. The Fed later carried through on the policy, fuelling a months-long stock market rally.
"It was at this same point last year when Bernanke used the summit at Jackson Hole to first give the market indications that a second round of Quantitative Easing could be forthcoming, should (the) growth outlook slip further, and so naturally there is a sense of déjà vu here," said Raymond at City Index.
