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Thursday July 01, 05:48
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European Stocks Gain
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European stocks rose, led by Nokia Oyj and SAP AG, on optimism interest-rate increases by the Federal Reserve will keep inflation in check without harming consumer spending in the U.S., the world’s biggest economy.
``This is a signal to buy stocks,’’ said Luc Van Heden, who oversees $107 billion as chief strategist at KBC Asset Management in Brussels. ``This action is a confirmation that the Fed is convinced the economy is strong.’’
The Dow Jones Stoxx 50 Index gained 1 percent to 2714.51 as of 10:20 a.m. in London. The Stoxx 600 rose 0.8 percent, led by Centrica Plc after the U.K. natural-gas distributor sold its Automobile Association unit and said it plans to return 1.5 billion pounds ($2.7 billion) to shareholders. The Euro Stoxx 50, a measure for the euro-region countries, added 1.1 percent.
Companies that depend on economic expansion to fuel sales gains benefited from the Fed’s commitment to a ``measured’’ pace of interest-rate increases in the country that provides a fifth of European export revenue. The Fed raised its benchmark rate a quarter-point to 1.25 percent after European markets closed.
The European Central Bank, which sets the interest rate for the 12 countries sharing the euro, today will probably keep its benchmark rate at a six-decade low of 2 percent, according to a survey of economists, because growth in Europe lags that of its largest trading partner. The ECB announces decision at 1:45 p.m. in Frankfurt.
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