- Europe Stocks Climb Toward 15-Month High on Fed Hike, Dutch Vote
European stocks rose after the Federal Reserve raised interest rates without speeding up the timeline of further hikes, while election results in the Netherlands spurred investor relief over the defeat of its populist party.
The Stoxx Europe 600 Index added 0.4 percent at 8:36 a.m. in London, touching its highest level since December 2015 and led by gains in industry groups deemed to benefit most from economic growth. Equities around the world jumped after the Fed noted the robustness of the U.S. economy, while saying it intends to keep its monetary policy accommodative for “some time.” The Dutch AEX Index rallied as much as 0.9 percent, poised for its highest close since December 2007.
Concern about political uncertainty has preoccupied European stock investors in 2017, with elections also approaching in France. The VStoxx Index of euro-area volatility plunged 23 percent, heading for its biggest slump on record.
- The Dutch “vote was considered a key litmus test for elections across the rest of Europe, and some of the boost to the euro is likely to come from expectations that the French will do the same as the Dutch and reject their own Far-Right candidate,” Kathleen Brooks, research director at City Index, wrote in a note.
- Metal prices rose following the Fed update, pushing Stoxx 600 miners toward the biggest gain since November. Energy shares tracked oil higher, while carmakers and banks were also among the best performers.
- Among shares active on corporate news, Deutsche Lufthansa AG climbed 5.5 percent after the airline said it sees 2017 revenue “significantly” above previous year’s figures.
- Renault SA dropped 4.8 percent after French media reported that the country’s economic watchdog found the carmaker had misled customers about how much its models pollute and that the company’s management was involved in the fraudulent strategy. Renault said it didn’t breach European or national vehicle standards and its models are not equipped with emissions-cheating software.
