Markets surged higher on Friday after US Federal Reserve chair Janet Yellen said she expected the Fed to start raising rates by the end of the year. The FTSE 100 Index added 147.5 points, or more than 2 per cent, to 6,109, after a 70-point fall in the previous session.
Germany's Dax and France's Cac 40 were both ahead by about 3 per cent. In New York the Dow Jones Industrial Average jumped more than 170 points in early trading. Markets had been struggling all week on the latest fears over China and the Volkswagen emissions scandal.
A decision by the Fed not to lift rates earlier this month had added to anxiety because it appeared to imply the US economy was not ready to withstand a hike, given risks from the rest of the world. However Ms Yellen’s remarks that global weakness would not be significant enough to stop a rates rise this year removed some of the uncertainty facing markets.
DUBLIN
The Iseq closed the day up nearly 2 per cent at 6,304, tracking its European peers. Swiss-Irish food group
Aryzta
bucked the feel-good factor, falling 4.5 per cent to €42.27 after making the surprise announcement it was selling its remaining 29 per cent stake in agri-services group
Origin Enterprises
.
Origin, which released worse-than-expected results earlier this week, also saw its shares sink by 4.4 per cent to €6.50. Setanta Asset Management later confirmed it had acquired 3.7 per cent stake in Origin on behalf of clients, representing an investment of €30 million.
Building materials group CRH in contrast saw it shares rise nearly 4 per cent to €24.65 on the back of positive soundings in the US. Ryanair was also buoyed by the general market upswing with its shares closing the week up 1.5 per cent, at €13.38. Packaging group Smurfit Kappa also enjoyed a lift, tracking industry rivals to close up 1.5 per cent, at €24.90.
LONDON
In London shares, banks, which stand to gain from a higher interest rate environment, were among those making gains.
Barclays
rose more than 3 per cent, or 8.5p, to 255p, while
HSBC
added 15.5p to 503.6p and
Royal Bank of Scotland
climbed 8.3p, to 319p.
Fellow state-backed lender Lloyds Banking Group added 1.7p to 75.5p as it was announced the government had sold another 1 per cent of the group. Meanwhile, commodities giant Glencore, hard hit by recent turbulence, saw initial gains fade away to fall 1.4p at 97.2p.
EUROPE
European shares ended higher after testing 2015 lows in the previous session, as concern over the global economy eased and a sell-off of car stocks began to slow. The car sector rose 2.49 per cent, but still closed its worst week in four years.
Volkswagen fell 4.32 per cent after Germany's transport minister said the company rigged emission tests on about 2.8 million diesel vehicles, pointing to cheating on a bigger scale than previously thought. BMW rose 4.24 per cent, while Daimler rose 3.53 per cent after denying allegations by a lobby group it had rigged emissions data for its vehicles.
NEW YORK
US stocks were higher in early afternoon trading after Ms Yellen said she expected interest rates to be raised this year, easing concerns about global growth and prompting a rally in bank shares. By early evening, the Dow Jones industrial average was up 194.19 points, or 1.2 per cent, at 16,395.51 and the S&P 500 was up 13.81 points, or 0.71 per cent, at 1,946.05.
Nike jumped 9.6 per cent to a record of $125.82 after its profit topped expectations on strong China growth. The stock gave the biggest boost to the Dow and the S&P. Bank of America, JPMorgan, Citigroup and Wells Fargo were up between 1.8 per cent and 2.6 per cent. Google fell 0.6 per cent to $650.76.
