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European shares end at 15-month high after Fed, Dutch vote

Published 17/03/2017, 04:25 am
© Reuters.  European shares end at 15-month high after Fed, Dutch vote
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* STOXX 600 end up 0.7 pct, touch 15-mth high

* Lufthansa touches one-year high after results

* Fed rate hike boosts miners, banks

* Anglo American tops STOXX after billionaire buys stake

* Renault drops as CEO targeted in diesel probe (Adds closing prices)

By Helen Reid

LONDON, March 16 (Reuters) - European shares hit their highest level in 15 months on Thursday after the Federal Reserve signalled no pick-up in the pace of monetary tightening and centre-right Prime Minister Mark Rutte won elections in the Netherlands.

The pan-European STOXX 600 .STOXX index ended up 0.7 percent at 377.73, after touching 377.76, its highest level since December 2015.

Amsterdam's AEX .AEX index hit its highest level in more than nine years, also rising 0.6 percent, while both Germany's DAX .GDAXI and France's CAC 40 .FCHI hit their highest levels since mid-2015.

Dutch PM Rutte fought off the challenge of anti-Islam and anti-EU rival Geert Wilders to score an election victory that was hailed across Europe by governments facing a rising wave of nationalism. Arne Petimezas, analyst at AFS Group in Amsterdam, said Dutch markets were already outperforming on Wednesday, and rising shares were mainly driven by the Fed's dovish tone.

The Fed raised rates for the second time in three months on Wednesday as expected but did not flag any plan to accelerate its outlook for monetary tightening.

Basic resource stocks were boosted by a sharp fall in the dollar against major currencies on Wednesday in reaction to the Fed's rate outlook. American AAL.L was the top European gainer, up 8.6 percent, after Indian billionaire and Vedanta Resources VED.L majority shareholder Anil Agarwal said he would buy a stake of up to 2 billion pounds ($2.5 billion) in the miner. That would make his Volcan Trust the second-biggest shareholder after South Africa's Public Investment Corp. led Europe's basic resource stocks .SXPP higher, the top sectoral gainers, up 3.3 percent.

Antofagasta ANTO.L , Fresnillo FRES.L , BHP Billiton BLT.L and Randgold Resources RRS.L were up 2 to 4.7 percent.

The Fed's rate hike lifted banking stocks .SX7P , which gained 1 percent, with Italian and Spanish lenders including BPER Banca EMII.MI and Santander SAN.MC leading the bounce.

Earnings reports also boosted some companies' stocks.

Lufthansa LHAG.DE gained 5.2 percent after its results. The German airline reported an improved net debt position and set a brighter outlook, saying it expected profits to fall only slightly despite lower fares and a rising fuel bill. insurer Generali GASI.MI rose 2.6 percent as it pledged a higher dividend after reporting its best profit in nine years. beat looks to be good quality and is well spread by division, with life up 18 percent y/y and non-life up 13 percent y/y," said UBS analysts.

Generali said it was confident in a future as an independent company, after Italy's largest bank Intesa Sanpaolo (MI:ISP) scrapped its bid to take over the insurer.

Renault RENA.PA was a top faller, down 3.4 percent after the French carmaker's CEO Carlos Ghosn was targeted in a French diesel cheating probe. ($1 = 0.8086 pounds)

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