European shares have hit their highest level in 15 months amid a mounting feelgood mood delivered by the prospect of a less sweeping tightening of US rates and a Dutch vote that held back a populist tide in Europe.In early trading on Thursday, the pan-European STOXX 600 index hit its highest level since December 2015, with Amsterdam’s AEX index rising to a nine-year high after Dutch centre-right Prime Minister Mark Rutte scored a resounding victory over anti-EU Geert Wilders.
Germany’s DAX also climbed to a new high for this year, while France’s CAC 40 hit its highest level since mid-2015.
The London stock exchange even hit a new all-time high, driven by the prospect of a flatter trajectory of US interest rate hikes and a more positive outlook by the American central bank for the world’s largest economy.
“There was a lot to process this Thursday morning, with investors breakfasting on the Dutch election result and the aftermath of the Fed’s latest policy decision,” said Spreadex analyst Connor Campbell.
And analysts at Citibank described the Fed’s move as a “dovish hike,” saying: “The world is slowly moving to a new rate paradigm.”
The prospect of the Fed raising rates by another 25 basis points at its June meeting has fallen from about 50 per cent mid-session on Wednesday to 47 per cent, according to CME FedWatch.
Anglo American was the top European gainer after Indian billionaire and Vedanta Resources majority shareholder Anil Agarwal said he would buy a stake of up to 2 billion pounds in the miner.
Anglo led Europe’s basic resource stocks higher, the top sectoral gainers, up 3.5 percent. Antofagasta, Fresnillo, BHP Billiton and Randgold Resources were in the top gainers, up 4.4 to 5.7 percent.
Lufthansa was among top gainers, up 5.1 percent after its results, despite the German airline saying profits were set to dip in 2017 on rising fuel costs.
Banking stocks gained after the U.S. Federal Reserve raised interest rates. The Eurozone banking index was up 1.7 percent.
Renault was the top faller, after the French carmaker’s CEO Carlos Ghosn was targeted in a French diesel cheating probe.
uhe/kd (Reuters, AFP)