European shares at highest levels in three months
Indices: European shares reached their highest levels in three months during trading on Thursday. The pan-European FTSEurofirst 300 index rose 1%, while the index of blue chips in the euro zone Euro STOXX 50 gained 1.1 percent. The stock exchange in Frankfurt German main measure DAX also rose by over 1%. In London, FTSE 100 advanced 0.9 percent and France's CAC 40 rose by a modest 0.4%.
Factors: In addition to the good news from the corporate sector, the optimism in the markets was supported by signs that the US economy is strong enough to absorb the expected increase in interest rates by the Federal Reserve. Representatives of the central bank, however, signaled that the pace of increase in interest rates will be slower than expected, which led to a decline in the dollar. A cheaper dollar has led to the growth of companies in the mining sector since it makes commodities cheaper for customers outside the United States. Expectations the European Central Bank to increase its financial incentives also support the market.
Comment: "The mood is positive thanks to solid economic growth in the US and almost full employment there," said Alessandro Allegri told Reuters, an analyst at Ambrosetti Asset Management. "In Europe and Japan, central banks continue their loose monetary policy, which is in favor of the stock market," he added. According to his forecast can be expected growth in European equities to continue in the coming weeks.
Currencies: The dollar fell against all major world currencies. US vlaluta the euro slid 0.5 percent to over 1.07 dollars (later in the day recover part of the losses) on Wednesday after the rate reached 1.0617 dollars - the highest level since April. Against the Japanese currency, the dollar also slid half a percent to 122.99 yen.
Commodity markets: weak dollar proved only short-term support for raw materials, Brent crude lost accumulated earlier in the session gains and returned to levels of 44 dollars per barrel. The effect was more stable for precious metals such as gold rose nearly 1%. The price of copper fell by 0.5% due to weak demand in China.