World Economy

Yellen’s Comments Boost Shares in Europe, Asia

Yellen’s Comments Boost Shares in Europe, AsiaYellen’s Comments Boost Shares in Europe, Asia

European shares rose on Tuesday after Federal Reserve Chair Janet Yellen pushed back expectations for a rate increase without raising concerns over the strength of the world’s largest economy.

Yellen’s remarks on Monday followed Friday’s dismal monthly jobs report, which increased jitters over the ability of the economy to absorb a rate hike as early as June. She called the jobs report “disappointing”, but said “one should not attach too much significance to a single report”, Reuters reported.

Firmer oil prices also helped sentiment. In spite of the upbeat mood, investors said volatility could increase in the near term as a British referendum on June 23 over whether to leave the European Union approaches.

The pan-European STOXX Europe 600 and the FTSEurofirst 300 indexes were both up 1.2%, extending the previous session’s slight gains.

Germany’s DAX outperformed, with the share index rising 1.7% after data showed that industrial output in Germany rose more than expected in April, suggesting that the motor of Europe’s largest economy was humming along at the start of the second quarter.

Among sectoral gainers, commodities-related stocks were in demand. The energy index advanced 2%, leading sectoral gainers, as oil prices held close to their highest in seven months, buoyed by the US dollar skimming its lowest in nearly a month and by falling Nigerian output.

Royal Dutch Shell was up 2.8%, also helped by news it would sell up to 10% of its oil and gas production, leaving up to 10 countries to cut costs following its $54 billion acquisition of BG Group.

Shares in Natixis rose 3.4%, the top gainer in the FTSEurofirst 300 index.

Meanwhile, Asian stocks rose across the board on Tuesday over the dovish comments from Yellen”, Nasdaq reported.

Japanese shares rebounded from a four-week low as the dollar regained some ground against the yen. The Nikkei average rose 95.42 points or 0.58% to 16,675.45 and the broader Topix index closed 0.63% higher at 1,340.77.

The benchmark S&P/ASX 200 index closed up 10.60 points or 0.20% at 5.37 and the broader All Ordinaries index closed up 10 points or 0.18% at 5,441. Major miners BHP Billiton, Rio Tinto and Fortescue Metals advanced 2-3%.

Seoul shares rallied on the back of buying by foreign investors after Yellen indicated no rush to raise U.S. interest rates. The benchmark Kospi average rose by 25.79 points or 1.30% to 2,011.63, its highest level since April 28. Market heavyweight Samsung Electronics rose 1.5% to extend gains for the fifth consecutive session. Steelmaker POSCO soared 6.9% on hopes of stronger profits.

India’s Sensex was up more than 1% after the Reserve Bank of India kept its benchmark interest rates on hold, but signaled the prospect of another rate cut later this year if monsoon rains dampen upward pressure on food prices.