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11 Feb 2021 | 17:02

Europe close: Stocks rise after Fed chief reassures

(Sharecast News) - European shares were mostly higher on Thursday as investors cheered US central bank chief Jerome Powell's decision overnight to reiterate the Federal Reserve's commitment to buttressing economic growth. Continued confidence in the ability of the US Congress to pass the Biden administration's $1.9trn fiscal stimulus package also fed investor sentiment.

The benchmark Stoxx 600 index ended up 0.46% to 411.35, alongside a 0.77% gain for the German Dax to 14,040.91, while the FTSE Mibtel inched up 0.18% to 23,307.24.

France's Cac-40 on the other hand slipped 0.02% to 5,669.82.

IG analyst Chris Beauchamp said markets were recovering some recent losses after US Fed chair Jerome Powell "laid to rest any fears about an overeager Fed moving to tighten policy prematurely".

"In a week mostly devoid of any heavyweight data on the economic front, the progress towards fiscal stimulus has been the key driver, but the presence of a speech by the FOMC chairman held back risk appetite yesterday."

"Fortunately for the bulls, Powell was keen to stress that there was no rush to change policy, and that 'substantial further progress' would need to be made on the Fed's dual mandate."

"Nonetheless, investors are still jittery, worrying that the recent highs for some indices will not hold, so we can expect more volatility around current levels even as the overall push higher continues."

In equity news, shares in Anglo-Swedish drugs maker AstraZeneca gave up early gains despite the company posting a spike in revenues, fuelled by strong demand for its oncology drugs, and predicted further strong growth for the current year.

The company, which last year developed a Covid-19 vaccine in conjunction with Oxford University, said total revenues rose 9% to $26.6bn in the year to December 31, 2020. Product sales rose 10% to $25.9bn.

Royal Mail shares rose 4.91% as the delivery firm said it expected full-year group adjusted profit to be "well in excess" of £500m after a strong rise in parcel revenues over the Christmas period.

Coca-Cola HBC shares rose 5% as the drinks bottler forecast a return to organic revenue growth in 2021.

French electricals distributor Rexel was up 7% as the company's fourth quarter sales exceeded expectations.

On the downside SSP shares slumped after the Upper Crust and Ritazza owner said it is considering debt and equity funding options.

Germany's Commerzbank fell 6% as the lender said its loss deepened in the fourth quarter.

Swedish defence company Saab fell 8% after posting fourth-quarter profits below market forecasts.
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