UK Retail Growth and Auto Rally Drive European Equities Higher
European stocks extended gains to close higher on the penultimate trading day of the week, with a rally in the auto sector and growth in the UK's retail trade sector boosting an already bullish market sentiment a day after the Federal Reserve raised interest rates for the first time in over nine years.
At the end of the Federal Reserve's two-day Federal Open Market Committee meeting on Wednesday, the Federal Reserve lifted its key interest rate from close to zero for the first time since June 2006 sending global markets rallying.
In addition to being the first rate increase in almost a decade for the world's largest economy, the rate hike breathed confidence into international markets indicating that the worst of the financial crisis' aftermath had passed.
In Europe, retail sales rose in the UK and hourly labor costs gained across the euro area. The quantity of retail goods bought in the UK rose by 1.7% in November compared to the previous month, and was up 5.0% compared to Nov. 2014, according to the Office of National Statistics.
A jump in e-commerce played a significant role, with the value of online sales increasing by 12.7% in November 2015 compared to the same month in 2014, and by 4.9% compared to October 2015. Lower shop prices also helped, with the price of goods sold in outlets falling by 3.3% in November compared to the same month a year earlier.
Hourly labor costs rose by a 1.1% across the euro area in Q3 of 2015 compared to the corresponding quarter in 2014, according to Eurostat, the statistical office of the European Union, with wages and salaries per hour worked rising by 1.4%.
The FTSE 100 closed 0.68% higher, the DAX jumped by 2.57% and the CAC-40 advanced by 1.14%.
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