Bank stocks help lift European shares to month-high
* FTSEurofirst 300 rises 0.5 pct at fresh month-high
* Euro STOXX 50 closes up 0.4 percent
* Fed Reserve extends monetary stimulus to U.S. economy
By Sudip Kar-Gupta
LONDON, June 20 (Reuters) - European shares closed at a fresh month-high on Wednesday, helped by a rise in bank stocks such as BBVA and Santander, as expectations of new stimulus measures from central banks supported equities.
The FTSEurofirst 300 index rose 0.5 percent to 1,014.30 points, its highest closing level since May 11 when it ended at 1,022.52 points.
The Euro STOXX 50 index also advanced by 0.4 percent. Germany's DAX rose 0.5 percent while France's CAC-40 gained 0.3 percent.
The U.S. Federal Reserve on Wednesday extended its monetary stimulus to a U.S. economic recovery that looks at risk of stalling.
Expectations that the European Central Bank may undertake similar measures to tackle the region's sovereign debt crisis have propped up Europe's stock markets in recent weeks.
"It has been sensible for investors to buy equities during the recent times of uncertainty because it is clear that central banks are gearing up to help the markets," said Cheviot Asset Management partner David Miller, whose firm manages around 3.8 billion pounds ($6 billion) of assets.
BANK STOCKS RISE
European banks were among the best-performing stocks, with the STOXX 600 European bank index rising by 1.5 percent.
Spanish banks BBVA and Santander rose 3.4 and 2.7 percent respectively, although they remain down by 20 and 10 percent respectively since the start of 2012 due to worries over debts in the Spanish financial system which have necessitated a bailout deal for Spain of up to 100 billion euros.
Fears that the debt crises in Spain and Greece, where many remain opposed to austerity measures that form part of a Greek bailout deal, will impact world markets have led authorities to prepare to inject fresh money into the financial system.
This, in turn, has spurred some traders to buy up shares in recent weeks, on expectations that equities markets may rise on the back of new central bank monetary stimulus measures.
"I've modestly added to German and French equities over the last week," said CSS Investments analyst Ravi Lockyer.
However, Cyrille Urfer - who heads up asset allocation at Swiss bank Gonet - said he remained underweight on European equities and overweight on cash due to the fact that the region's economic and debt problems were far from over.
"We remain extremely cautious on European equities. I think it's still too early to go back into them," he said.
- Tweet this
- Share this
- Digg this
- UPDATE 2-Malaysia Airlines plane returns safely after landing gear scare
- On Easter, Pope calls for end to war, condemns waste exacerbating hunger
- Abdullah widens lead in Afghan presidential vote - latest count
- Australia sees "regroup" on Malaysian plane search in a few days
- Bangalore-bound Malaysia Airlines plane to make emergency landing
Nitin Gadkari, former president of the Bharatiya Janata Party and a member of the BJP’s manifesto committee, speaks to Reuters. Here are the edited excerpts. Full Article