Euro stocks soar on Fed’s interest rate signal; DAX up 1.03%

Investing.com - European shares soared higher as the Federal Reserve signaled interest rates will remain low to support the economy.

At the close European trade, the EURO STOXX 50 gained 0.46%, France's CAC 40 climbed 0.99%, while Germany’s DAX soared 1.03%.  Meanwhile, in the U.K. the FTSE 100 added 1.34%.
 
Creating the risk on environment, Fed Vice Chairman, Janet Yellen lent support to the central bank’s stance that interest rates will remain low through 2014, since the goal of full employment was missed and inflations remains steady.
 
Yellen stated, “I consider a highly accommodative policy stance to be appropriate in present circumstances.”
 
Dampening equity enthusiasm, the number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly according to governmental data..

In a report, the U.S. Department of Labor stated the number of individuals filing for initial jobless benefits last week rose to a seasonally adjusted 380K, from 367K in the preceding week whose figure was revised up from 357K.

Analysts had expected initial jobless claims to fall to 355K last week.
 
In addition, the U.S. trade balance fell less-than-expected last month.

In a report, Bureau of Economic Analysis stated that U.S. trade balance dropped to a seasonally adjusted -46.0B, from -52.5B in the preceding month whose figure was revised up from -52.6B.

Analysts had expected U.S. trade balance to fall -52.0B last month.

Casting an equity bearish aura in the euro zone,  Italy auctioned EUR2.88 billion of the EUR3 billion of three-year bonds on offer, at an average yield of 3.89% compared to 2.76% at a similar auction last month, amid persistent concerns over the risk of sovereign debt contagion from Spain.

However,  the equities remained supported after European Central Bank Executive Board member Benoit Coeure said Wednesday that the central bank still had its bond-buying program available as an option to ease pressure on Spanish bond yields.

He added that the current level of market pressure on Spain was not justified given the reforms being undertaken by its government.

In addition, adding to the stock bullish fervor,  official data showed that industrial production in the euro zone rose unexpectedly in February, but the year-on-year fall was still the steepest since December 2009.

Eurostat reported  industrial production climbed to a seasonally adjusted 0.5%, from 0.2% in the preceding month, defying expectations for a 0.3% decline.

Industrial output dropped 1.8% in the year to February, in line with expectations
 
Meanwhile in Japan, Bank of Japan Governor Masaaki Shirakawa promised to continue to add monetary stimulus despite demands from politicians to end deflation.
 
In other news, speculation that China will report a strong GDP Friday also worked to lift stock prices.
 
Mining companies led the advance with Rio Tinto and BHP Billiton advanced amid copper price speculation.
 
Gerresheimer AG, the German glass and plastic products maker, added 10% after raising its forecasts for the year.
 
Royal Dutch Shell fell 1.1% after it launched an investigation of a “light sheen” of oil on the Gulf of Mexico.
 
U.S. stocks are trading sharply higher with the Dow up 1.31%, the S&P 500 higher by 1.26% and the Nasdaq ahead 1.16%.
 
Traders are anticipating China’s GDP, U.S. CPI and Bernanke’s speech on Friday.