Eurostoxx 50: 2,183.39 (+24.32) Frankfurt DAX: 5,475.18 (–4.82) Paris CAC: 3,051.36 (+34.37):EUROPEAN STOCKS rebounded from a two-year low yesterday, amid speculation the Federal Reserve may signal additional stimulus measures this week and as prospects for an end to the war in Libya boosted energy companies.

The benchmark Stoxx Europe 600 Index rallied 0.8 per cent in London.

The Fed is holding its annual symposium this weekend. This time last year chairman Ben S Bernanke hinted that the central bank might embark on a second round of asset purchases, kicking off a 28 per cent rally in the SP 500 that ended in a three-year high on April 29th.

“We believe the Fed will want to reassure markets and could use Friday’s Jackson Hole symposium to do so,” Graham Bishop, an equity strategist at Royal Bank of Scotland in London, wrote in a report. “The Fed’s commitment to keep rates on hold until 2013 is, arguably, the precursor to a more significant policy announcement.”

Eni, the Italian oil company that was the biggest foreign producer in Libya, rallied 6 per cent to €13.23 after rebel fighters reached the capital Tripoli. The overthrow of Muammar Gadafy’s government may allow Eni and other oil producers to start fields closed by the civil war.

Petrofac said yesterday that it expects to bid for work in Libya after the end of the conflict it added 3.9 per cent to 1,214p.

Total, France’s largest oil firm, climbed 2.4 per cent to €33.75.

Petropavlovsk jumped 6.9 per cent to 784p as Citigroup upgraded the producer of gold in Russia to “buy” from “hold” and the precious metal rallied for a sixth day.

Avocet Mining surged 7 per cent to 259.25p.

GDF Suez, Europe’s largest natural-gas network operator, climbed 4 per cent to €20.26, leading a rally in utilities.

Suez Environnement, a water company, gained 1.8 per cent to €11.40 and International Power increased 2.1 per cent to 300.2p.

Jyske Bank dropped 6.8 per cent to 147 kroner after Denmark’s second-largest lender reported a 47 per cent decline in second-quarter net income.

Sydbank, Denmark’s third-largest publicly traded lender, lost 3 per cent to 97.55 kroner and Danske Bank slid 3.2 per cent to 74.65 kroner. – (Bloomberg)