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European stocks gain from Wall Street bounce

London’s benchmark FTSE 100 index of leading companies added 0.40 percent to 6,351.11 points and in Paris the CAC 40 won 0.42 percent to 3,707.12.

Frankfurt’s DAX 30 index gained 0.82 percent to 7,738.16 points, aided also by official data which showed that Germany’s jobless total fell to its lowest level in five months in February.

Milan’s FTSE Mib index dipped 0.02 percent to 15,822.40 points amid ongoing political deadlock in Italy after inconclusive elections that had sparked a fierce sell-off earlier in the week.

In foreign exchange activity, the euro fell to $1.3118, down from $1.3136 late in New York on Wednesday. Gold prices declined to $1,590.95 an ounce on the London Bullion Market from $1,604.25 Wednesday.

In Wall Street action overnight, the Dow index jumped 1.26 percent to end at its highest level since October 2007, sparking another raft of gains in Asian trading.

“European equities moved higher ... following fresh five-year highs in the US indices last night,” said Matt Basi, analyst at CMC Markets trading group.

“Dovish comments from Fed Chairman Bernanke went some way to allaying fears of an early end to QE and became the primary focus for traders, who parked concerns over the political picture in Italy firmly on the back burner.”

Sentiment rose also on upbeat US economic data and after European Central Bank chief Mario Draghi soothed concerns over the eurozone outlook.

“We are committed to preserving the integrity of our currency, in the interests of all people of the euro area,” Draghi said, reasserting its commitment to buy up bonds of debt-ridden countries.

The comments, which came after Bernanke declared that Fed easing measures would stay in place, came as relief to markets after Italy’s poll deadlock raised fears of a return to Europe’s debt crisis.

“Central banks are back to the rescue as Bernanke made his commitment clear to keep the money presses going until unemployment in the US has declined,” said analyst Angus Campbell at trading group Capital Spreads.

“US stocks soared last night and that’s put a spring in the step of European investors... No Italian elections can get in the way of or dent the resolve of the central bankers it would seem, who remain ready to act in order to support their economies and currencies.”

Wall Street was boosted also by news that US pending home sales rebounded sharply in January to the highest level in almost three years.

Durable goods orders in January, excluding volatile aircraft, surged 1.9 percent, with gains particularly strong in capital goods, suggesting business confidence in the economy in upcoming months.

European investors meanwhile pored over a raft of company results in Thursday trade.

Royal Bank of Scotland shares sank 4.30 percent to 331.87 pence after the group logged its fifth successive annual loss on the back of compensation payouts, Libor rate-rigging fines and a vast accounting charge.

Losses after tax widened to £5.97 billion ($9.05 billion, 6.89 billion euros) in 2012, when the bank was rocked by a series of scandals. That compared with a shortfall of £1.997 billion in 2011.

Meanwhile, International Airlines Group shares soared 7.62 percent to 238.60 pence, despite the company posting an annual net loss of 943 million euros ($1.24 billion) on financial woes at Spanish wing Iberia and a high fuel bill.

Across in Frankfurt, German pharmaceuticals giant Bayer saw its share price surge 2.55 percent to 75.74 euros after expressing optimism for the current financial year, but also revealed that profits had fallen slightly in 2012.

On the downside, Deutsche Telekom sank 1.32 percent to 8.12 euros after it announced that massive writedowns in the United States pushed it into a net loss of 5.255 billion euros ($6.9 billion) in 2012.