By Sara Sjolin and Victor Reklaitis, MarketWatch

EDF drops after trimming outlook, then closes slightly higher

European stock markets scored solid advances on Thursday after the U.S. Federal Reserve refrained from raising interest rates and said it needs more evidence of a stronger economy before it tightens policy.

The Stoxx Europe 600 index rallied 1.6% to end at 347.86, giving the regional benchmark a second straight day of gains.

Mining and oil firms were among the biggest advancers, scoring a boost from a weaker dollar in the aftermath of the Fed decision, released after the European close on Wednesday.

The U.S. central bank kept its main benchmark rate at 0.25% to 0.50%, but hinted a rate hike is on the cards in December (http://www.marketwatch.com/story/fed-dotplot-points-to-one-rate-hike-in-2016-just-two-in-2017-2016-09-21). Traders in Europe and the U.K. closely watch where U.S. interest rates are headed, as they are a major driver for the global economy and currency markets.

"Although the monetary policy decision was viewed as dovish, which sent equities higher across the board and the dollar lower, the Federal Reserve has never been seen as divided so far this year," said Hussein Sayed, chief market strategist at FXTM, in a note.

"Three out of the ten voting members dissented against the decision, calling for an immediate rate hike, this made the call for a December rate increase much stronger," he added.

Metals and oil prices (http://www.marketwatch.com/story/oil-keeps-moving-higher-on-another-drop-in-us-crude-stocks-2016-09-22) climbed as the ICE U.S. Dollar Index dropped 0.5%, helping to boost Europe's commodities companies.

Shares of BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gained 4.1%, Boliden AB (BOL.SK) added 4.6%, and Randgold Resources Ltd. (RRS.LN) rose 4.4%.

Among major oil companies, Eni SpA (ENI.MI) put on 1.1%, and Total SA (TOT) (TOT) climbed 3.7%, while BP PLC (BP.LN)(BP.LN) added 2.4%.

Other movers: Shares of A.P. Moeller-Maersk AS (MAERSK-B.KO) advanced 3.4% after the Danish company said it is splitting into two companies (http://www.marketwatch.com/story/maersk-to-split-into-2-units-energy-and-transport-2016-09-22), spinning off its oil unit. The remainder will focus on transportation and logistics.

Rocket Internet SE (RKET.XE) finished 6.8% higher after the German tech company said the biggest companies in its portfolio narrowed their combined loss in the first half of the year (http://www.marketwatch.com/story/rocket-internets-portfolio-firms-narrow-losses-2016-09-22).

Shares in Ericsson AB (ERIC) rose 2.7% after media reports (http://www.reuters.com/article/us-sweden-ericsson-idUSKCN11S0G9) that the maker of mobile telecom equipment said it plans to shutter its last manufacturing site in Sweden and cut about 3,000 jobs.

Nokia Corp. (NOK) (NOK) climbed 3.4% after it launched a public buyout offer (http://www.marketwatch.com/story/nokia-makes-buyout-offer-for-alcatel-lucent-shares-2016-09-22) for all securities of Alcatel-Lucent (ALU.FR) that the Finnish telecom-equipment maker doesn't yet own.

On a less upbeat note, Electricite de France SA (EDF.FR) dropped in the early going after the utility company late Wednesday trimmed its earnings outlook (http://www.marketwatch.com/story/edf-trims-outlook-on-lower-nuclear-power-output-2016-09-22). But the stock recovered and finished 0.4% higher.

Indexes: Germany's DAX 30 index jumped 2.3% to close at 10,674.18, while France's CAC 40 index added 2.3% to finish at 4,509.82.

The U.K.'s FTSE 100 index gained 1.1% to end at 6,911.40 (http://www.marketwatch.com/story/ftse-100-rallies-as-fed-keeps-interest-rates-on-hold-2016-09-22).

Economic news: The European Central Bank said in its economic bulletin it expects eurozone economic growth to continue to grow at a moderate pace (http://www.ecb.europa.eu/pub/economic-bulletin/html/eb201606.en.html), but with downside risks because of the economic and political uncertainty globally. It warned that the U.K.'s Brexit vote is likely to weigh on the country's economy.

In the same vein, the Bank of England's Financial Policy Committee also said the U.K. is facing a "challenging period of uncertainty and adjustment" (http://www.wsj.com/articles/boe-warns-of-post-brexit-challenges-facing-u-k-economy-1474534896?mod=wsj_nview_latest) as a result of the EU referendum.

In addition, ECB President Mario Draghi warned the region's banking sector (http://www.marketwatch.com/story/ecbs-draghi-warns-crowded-banking-sector-is-squashing-profits-2016-09-22) is getting too crowded, with overcapacity eroding profits and ultimately forcing some lenders to shake up their business.

French manufacturing confidence rose unexpectedly in September (http://www.marketwatch.com/story/french-manufacturing-confidence-rises-unexpectedly-2016-09-22), rising to 103 from 101 in August.

 

(END) Dow Jones Newswires

September 22, 2016 12:09 ET (16:09 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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