LONDON, July 3 (Reuters) - European shares rallied on
Thursday as investors read comments from European Central Bank
President Jean-Claude Trichet to mean the bank would pause after
it delivered a widely expected 25 basis points rise.
At 1301 GMT, the FTSEurofirst 300 index of top European
shares was up 0.7 percent at 1,176.16 points.
"He is very clearly signalling that he has no intention of
tightening again: "starting from here, I have no bias" - you
can't get clearer than that," said James Shugg, international
economist at Westpac.
"The main reason is Trichet has come out and said from here
on he's got absolutely no bias," said a trader. "Some people
were fearful of the tone of what he would say, that interest
rates would go higher in the future, but the fact that he's said
he's got no bias from here shuts the door on the fact that more
interest rates are inevitable."
"You also have the U.S. closed tomorrow ... you're starting
to see some of the hedge funds come in and short cover ahead of
the weekend," the trader added.
Banks were the top positive influence on the European
market. Royal Bank of Scotlandwas up 4.3 percent, while
BNP Paribasand Credit Agricole were up
between 3.3 and 6 percent.
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