European stocks surge on US records

November 19, 2013

Frankfurt (Nov 19)  European main stock markets opened the week higher and the euro advanced against the dollar on Monday as dealers took their cue from a record early session on Wall Street.

London witnessed some huge gains and losses for individual shares, with Aberdeen Asset Management soaring and energy group Petrofac slumping.

At close, London's benchmark FTSE 100 index climbed 0.45 percent to 6,723.46 points.

Frankfurt's DAX 30 added 0.62 percent to set a new record high close of 9,225.43 points, and the CAC 40 in Paris rose 0.66 percent to 4,320.68 points.

European shares added on to earlier gains when Wall Street's Dow and S&P 500 blasted to new intraday records on Monday fuelled by a wave of new Boeing plane orders and continued positive investor sentiment for stocks.

In midday trade, the Dow Jones Industrial Average was up 0.25 percent at 15,961.70, but earlier it crossed the 16,000 milestone for the first time.

The broad-based S&P500 made its first foray above 1800, though later stood just under that at 1799.08 points, a 0.05 percent gain from Friday.

"The global markets remain very much risk-on after Janet Yellen signalled she wants to play it safe by continuing with the current loose monetary policy," said Capital Spreads dealer Jonathan Sudaria.

Yellen told senators reviewing her nomination as Federal Reserve chief that US growth was still too fragile and unemployment too high to begin cutting the bond-buying scheme, which has provided much-needed support to the economy.

In foreign exchange, the European single currency rose to $1.3522 from $1.3493 late in New York on Friday.

The euro climbed also to 83.92 pence against the British pound, which was slightly lower at $1.6112.

The dollar fell to 100.04 yen from 100.12 yen on Friday.

On the London Bullion Market, the price of gold slid to $1,283.50 an ounce from $1,287.25 on Friday.

"Fed chair-elect Janet Yellen's dovish tone at last week's testimony before the Senate Banking Committee is still weighing modestly upon the US dollar in the near-term," said Lee Hardman, currency analyst at the Bank of Tokyo-Mitsubishi.

Yellen has given no hint of when she would wind down the $85 billion-a-month scheme, saying -- like current chairman Ben Bernanke -- everything was data-driven and that the latest data suggested the economy still required Fed support.

Her comments have meanwhile come as some relief to emerging economies, which have been in turmoil in recent months owing to uncertainty about the future of the stimulus, which has been credited with a global investment splurge.

Traders were also cheered after China on Friday released a blueprint for restructuring the world's number two economy that pledged to open up the financial sector and relax restrictions on investment.

Silver Phoenix Twitter                 Silver Phoenix on Facebook