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European stocks continue rally

European stocks continue rally
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First Published: Thu, Mar 22 2007. 08 01 PM IST
Updated: Thu, Mar 22 2007. 08 01 PM IST
London: European stocks headed for the longest rally this year on 22 March 2007 after the Federal Reserve in the U.S. indicated it’s no longer inclined to raise interest rates.
DaimlerChrysler AG and Siemens AG, which make a large proportion of sales in the world’s biggest economy, led a sixth day of gains in the Dow Jones Stoxx 600 Index. Eiffage SA and Valeo SA rose on takeover speculation.
“It’s reassuring that we are coming to the end of this tightening bias,” said Fabrice Theveneau, head of pan-European equity research at Societe Generale in Paris. “We are seeing more energy coming into the market with merger and acquisition activity. The Fed is just adding to the good news.”
The Stoxx 600 added 1.5% to 374.08 at 1316GMT in London. The Stoxx 50 rose 1.7% and Euro Stoxx 50, a measure for the 13 nations sharing the euro, gained 2% .
Asian stocks climbed to a three-week high and U.S. stocks on 21 March 2007 posted the biggest gain in eight months after the Fed dropped a reference to “additional firming” in its statement.
Fed officials held the benchmark interest rate at 5.25% for a sixth meeting, matching the estimates of all 94 economists surveyed by Bloomberg.
National benchmarks rose in all 18 western European markets that were open. The U.K.’s FTSE 100 added 0.8%. France’s CAC 40 gained 1.7% and Germany’s DAX rose 2.1%.
“Stocks are well priced if the Fed keeps rates unchanged or even lowers them once,” said Joaquin Garcia Huerga, who helps manage $1.5 billion at Ahorro Corporacion Gestion in Madrid. “Companies also seem to be feeling that stocks are a good buy. We see more mergers and acquisitions.”
DaimlerChrysler, which makes most of its sales in the U.S, climbed 2.6% to 58.48 euros. Siemens surged 3.5% to 82.5 euros. UBS AG, which counts the Americas as its largest market afte
r Europe, added 2.6% to 73.35 Swiss francs.
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First Published: Thu, Mar 22 2007. 08 01 PM IST
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