European Markets Advance 1.5% After Yellen Stressed Caution

Lucy Stoeva
30 Mar, 2016
New York City

European markets advanced 1.5% after U.S. Fed Chair signaled caution in raising interest rates. Steelmakers traded higher on hopes of a European consolidation after Tata Steel said it would leave the British market. Metro AG plans to split its wholesale and electronics retailing businesses.

[R]4:00 PM Frankfurt, Germany – European markets advanced more than 1.5% after U.S. Fed Chair signaled caution in raising interest rates. Steelmakers traded higher on hopes of a European consolidation after Tata Steel said it would leave the British market. Metro AG plans to split its wholesale and electronics retailing businesses.[/R]

European shares gained ground on Wednesday after Federal Reserve Chair Janet Yellen signaled caution in raising U.S. interest rates.

In a speech at the Economic Club of New York late on Tuesday, Yellen said that while the U.S. economy remains on track, global developments increase risks to the U.S. economy.

Yellen reaffirmed Fed’s intention to only cautiously and gradually increase interest rates.

After Yellen’s comments the U.S. dollar weakened against the euro and fell 0.26% to 88.30 euro cents in Wednesday afternoon trading in London and in Frankfurt.

Shares of mining companies recorded strong gains as the dollar-denominated commodities benefited from a weakening dollar.

Anglo American soared 11.8%, BHP Billiton jumped 5.8%, Glencore rallied 5.4%, and Antofagasta gained 3.5%.

Oil prices rebounded from yesterday losses. Brent crude oil futures advanced 1.33% to $39.66 per barrel and WTI crude oil futures climbed 0.89% to $38.66 a barrel.

Among oil stocks, Seadrill advanced 5.8%, Tullow Oil surged 3.9%, Portugal’s Galp Energia rose 4.2%, Royal Dutch Shell gained 3.4%, and BP added 2.8%.

Steelmakers traded higher on hopes of a European consolidation after Tata Steel said it would leave the British market.

ThyssenKrupp soared 8.3%, Outokumpu jumped 6.5%, and ArcelorMittal advanced 3.9%. Aluminum producer Norsk Hydro gained 5.5%.

In London, the FTSE 100 rose 97.27, or 1.6%, to 6,203.17, while in Frankfurt, the DAX index gained 158.67, or 1.60%, to 10,046.61.

In Paris, the CAC 40 index added 77.75, or 1.78%, to 4,444.42.

Metro AG surged 11.5% to €27.40 after the German retailer said it was considering splitting itself into two independently listed entities, wholesale and food business and consumer electronics segment.

Premier Foods Plc jumped 6.64% to 60.25 pence after the U.K. food company agreed to negotiate a merger with U.S. based McCormick & Co, despite describing the McCormick’s bid as “too low.|”

McCormick revised its bid to 65 pence per share in cash with enterprise value for Premier Foods of £1.5 billion.