* 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 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
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.