European stocks extend gains on Fed move; DAX jumps 1.48%

Investing.com - European stock markets extended gains on Thursday, after the Federal Reserve said it was likely to keep interest rates near zero until at least late 2014 and to implement further stimulus measures.

During European afternoon trade, the EURO STOXX 50 surged 1.34%, France’s CAC 40 jumped 1.13%, while Germany’s DAX 30 soared 1.48%.

At the conclusion of its rate setting meeting, the Fed said economic conditions will likely “warrant exceptionally low levels for the federal funds rate at least through late 2014.” The central bank had previously pledged to keep interest rates close to zero until mid-2013.

Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table,“ indicating that the bank may embark on a third round of quantitative easing.

Elsewhere, talks on a debt swap deal between debt strapped Greece and its private creditors were to resume in Athens later in the day.

Financial stocks remained higher as shares in French lenders BNP Paribas and Societe Generale climbed 1.28% and 0.95%, while Germany’s Deutsche Bank and Commerzbank jumped 1.54% and 1.42% respectively.

Peripheral lenders were also higher with Italian Unicredit and Intesa Sanpaolo surging 2.11% and 2.21%, while shares in Spain’s BBVA and Banco Santander rose 2.07% and 2.01%.

Elsewhere, Technip gained 0.57% after the French oil services company won a contract worth more than EUR900 million euros from Lukoil Neftochim Burgas for the engineering, procurement and construction of a hydrocracking complex in Burgas, Bulgaria.

In London, commodity-heavy FTSE 100 climbed 1.12%, boosted by strong gains in mining stocks.

Rio Tinto and Bhp Billiton extended earlier gains, with shares soaring 4.49% and 3.42%, while copper producers Xstrata and Kazakhmys skyrocketed 4.70% and 6.87% respectively.

Meanwhile, Petropavlovsk, which mines gold and iron ore in Russia, rallied 9.83% after setting a 680,000 ounce production target for 2012. Production in 2011 rose 24% to 630,100 ounce, the company said in a statement.

U.K. lenders were also sharply higher with Lloyds Banking soaring 5.29% and the Royal Bank of Scotland climbing 4.11%, while Barclays and HSBC Holdings added 3.65% and 0.63%.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a rise of 0.36%, S&P 500 futures signaled a 0.33% increase, while the Nasdaq 100 futures indicated a 0.19% gain.

Also Tuesday, a report showed that German consumer climate improved unexpectedly in January.

Later in the day, the U.S. was to release official data on initial jobless claims as well as a report on durable goods orders.