Fed move boosts European shares to six-month high

* FTSEurofirst 300 index up 1.2 percent

* BHP Billiton jumps on Potash bid block

* Man Group climbs on AHL revival

* For up-to-the minute market news, click on [STXNEWS/EU]
By Joanne Frearson

LONDON, Nov 4 (BestGrowthStock) – European shares rose on Thursday
to their highest level since April after the U.S. Federal
Reserve unveiled a plan to buy assets, while BHP Billiton
(BLT.L: ) jumped after Canada blocked its Potash (POT.TO: ) bid.

By 1003 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index of top shares was 1.2 percent higher at 1,102.19 points,
trading above 1,100 for the first time since April.

“Consensus-beating results continue to be supportive to the
market along with the fact authorities seem to be ready willing
and able to support the economic recovery, which is good news,”
Henk Potts, equity strategist at Barclays Wealth, said.

Risk appetite was boosted after the U.S. central bank said
it would spend about $75 billion per month buying longer-term
Treasury bonds through the end of June and could adjust
purchases depending on the strength of the recovery.

The VDAX-NEW volatility index (.V1XI: ), one of Europe’s main
barometer’s of investor anxiety, dropped 11.5 percent to hit a
near two-week low, signalling a rise in investor appetite for
risky assets.

Commodity stocks were given a boost on hopes the Fed
stimulus would spur global recovery, with crude oil (CLc1: ) and
metal prices ticking higher, with the STOXX Europe 600 Basic
Materials (.SXPP: ) index surging 3.2 percent.

“Our belief is the biggest direct beneficiary (to another
round of quantitative easing) would likely be the mining sector,
as strong international capital flows reinforce powerful
domestic credit creation in emerging markets. Also this is one
of the most correlated sectors to rising producer price
inflation,” UBS said in a note.

BHP Billiton gained 4.5 percent after Canada blocked BHP’s
$39 billion bid for Potash Corp (POT.TO: ) (POT.N: ).


Strong corporate results also helped boost banking stocks.
BNP Paribas (BNPP.PA: ) rose 3 percent after forecast beating
results and the French bank ruled out a Basel-linked capital
increase. [ID:nLDE6A22L1]

Other financial stocks were also in demand on the back of
strong results. Man Group (EMG.L: ), the world’s largest listed
hedge fund firm, gained 6.9 percent after it said client assets
rose to $40.5 billion at end-Sept. [ID:nLDE6A21CD]

Swiss Reinsurance (RUKN.VX: ) rose 6.4 percent after the
world’s second-biggest reinsurer beat third-quarter profit (Read more your timing to make a profit.)
expectations on low catastrophe payouts. [ID:nLDE6A222U]

Construction stocks also featured among the top performers.
HeidelbergCement (HEIG.DE: ) jumped 7.2 percent after it beat
expectations for third-quarter operating profit. [ID:nLDE6A304K]

The technical picture looked bullish, though Bill McNamara,
analyst at Charles Stanley, said “the Euro STOXX 50 (.STOXX50E: )
would need to rise above its October high of 2,891 to convince
the market it is making an assault on the peak reached in April
of 3,027.”

The index was up 1.9 percent at 2,882.76 points.

Later in the session investors will eye interest rate
decisions by the Bank of England and European Central Bank. The
Bank of England is likely to announce at 1200 GMT that it is
keeping the base rate at its record low of 0.5 percent.

With the British economy having grown strongly in the last
two quarters, analysts say further quantitative easing by the
BoE is unlikely for now.

The European Central Bank, which makes its announcement at
1245 GMT, is set to keep its key rate unchanged at 1 percent.

Across Europe, Germany’s DAX (.GDAXI: ) gained 1.4 percent and
the FTSE 100 (.FTSE: ) index rose 1.4 percent both hitting their
highest level since June 2008, while France’s CAC 40 (.FCHI: ) was
up 1.9 percent its highest level since late April.
(Reporting by Joanne Frearson)

Fed move boosts European shares to six-month high