By RTT News,
December 19, 2013, 01:59:00 AM EDT
(RTTNews.com) - European stocks are poised to open higher on Thursday after Wall Street stocks reacted surprisingly well to the Federal Reserve's decision to eventually trim its stimulus efforts. Investors breathed a sigh of relief after the Fed left interest rates untouched at the existing low and stressed that asset purchases are not on a "pre-set course."
Citing the recent improvement in economic activity and labor market conditions, the Fed said it would reduce the pace of asset purchases by $10 billion a month beginning January. It sees the bond-purchase program coming to an end by late next year, with the pace of tapering contingent on incoming labor market and inflation data. Investors seem to be impressed by the Fed's reassuring comments on the world's largest economy.
The Asian markets are trading mostly higher, with Australian and Japanese shares rallying sharply, as the Fed's decision and its forward guidance on rates removed much uncertainty over the timing and scale of QE tapering. Adding cheer to the Christmas mood, the U.S. Senate yesterday passed a two-year budget deal that prevents another government shutdown for the next two years.
Closer home, European Union finance ministers have struck a deal on a much-awaited scheme to handle bank failures in the region, ahead of EU leaders' summit in Brussels today. The ministers agreed to set up a EUR 55 billion-single resolution fund over the next 10 years, financed by bank levies raised at national level. The fund will be backed by a new agency which will decide how to shut down a troubled lender.
In corporate news, Airbus parent EADS NV said that it has received an order from low-cost airline AirAsia for 25 more Airbus A330-300 aircraft in a deal valued at $6 billion.
French builder Vinci SA has bagged a contract valued at 440 million euros or $600 million for the Northwest Corridor project in Atlanta, Georgia.
Brazil said it has awarded the most awaited $4.5 billion contract to Sweden's defence and security company Saab AB for the supply of 36 JAS 39E Gripen fighter jets.
Swiss lender Credit Suisse Group AG was sued by the New Jersey attorney general accusing it of misrepresenting the risk to investors in over $10 billion in residential mortgage-backed securities.
Novartis International AG said that its generic pharmaceuticals division, Sandoz, has initiated a Phase III clinical trial with its biosimilar version of AbbVie's best-selling drug Humira.
The European markets advanced on Wednesday, with sentiment boosted by stronger-than-expected German sentiment and U.S. housing data as investors awaited the Fed's decision. The German DAX rose 1.1 percent, France's CAC 40 added a percent and the U.K.'s FTSE 100 edged up 0.1 percent.
U.S. stocks rallied overnight, as investors digested upbeat housing starts data and cheered the Federal Reserve's decision to eventually start tapering its historic stimulus program. The Dow jumped 1.8 percent and the S&P 500 climbed 1.7 percent to reach fresh record closing highs, while the tech-heavy Nasdaq advanced 1.2 percent.
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