European Shares Extend Gains On Fed’s Dovish Message

European stocks edged higher on Thursday as Treasury yields pulled back after a steady stream of dovish comments from Fed officials.

Speaking on Wednesday to the Economic Club of Washington, Fed Chair Jerome Powell reiterated that the Fed would only begin winding down its asset purchases when it’s made substantial progress towards its goals.

He also signaled that tapering would happen “well before” the U.S. central bank starts considering raising interest rates.

The pan European Stoxx 600 rose 0.3 percent to 438.04 after closing up 0.2 percent on Wednesday. The German DAX edged up 0.2 percent, while France’s CAC 40 index and the U.K.’s FTSE 100 gained around 0.3 percent.

Swiss engineering company ABB rallied 2.3 percent after raising its full-year sales outlook.

Norwegian lender Sbanken jumped 30 percent after the country’s largest bank DNB announced an all-share offer for the rival.

Dutch brewer Heineken NV gained 1.4 percent. The company said it aims to be carbon neutral in its production sites by 2030 in order to meet the 1.5°C goal set by the Paris Agreement.

Glencore, BHP, Anglo American and Antofagasta rose between 1.1 percent and 2.3 percent as metal prices hit multi-year highs supported by weaker dollar and Fed comments over strong U.S. economic recovery.

BP Plc and Royal Dutch Shell were moving lower as oil edged lower after climbing nearly 5 percent overnight on signs on increasing crude demand.

Food delivery company Deliveroo Holdings fell nearly 2 percent. In its first trading update since its market debut last month, the company said its orders more than doubled in the quarter to end-March.

GlaxoSmithKline declined 1.3 percent. The pharmaceutical giant said that it has stopped enrolling patients in a trial studying a combination drug therapy using feladilimab in cancer patients.

Advertising company Publicis Groupe jumped 3.7 percent. The company has returned to organic growth for the first time since before the COVID-19 pandemic.

German real estate companies were in focus after the Constitutional Court ruled that Berlin’s rent cap was unconstitutional.

Deutsche Wohnen climbed 3.3 percent, LEG Immobilien gained about 1 percent and TAG Immobilien added 0.9 percent.

In economic news, German consumer prices grew 1.7 percent year-on-year in March, in line with the preliminary estimate, following a 1.3 percent rise in February, final data from the statistical office Destatis showed. A similar higher rate was last reported in February 2020.

French consumer prices increased 1.1 percent year-on-year in March, in line with the provisional estimate, and faster than the 0.6 percent rise in February, final data from the statistical office Insee showed. This was the highest rate since February 2020, when prices were up 1.4 percent.

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