European stocks rallied to a 14-month high early today, led by growth-oriented stocks like miners, after the launch of a new monetary stimulus programme from the US Federal Reserve in its latest attempt to drive growth in the world's largest economy.
After the European closing bell yesterday, the Fed said it would pump $40 billion into the US economy each month until it saw a sustained upturn in the weak jobs market. It also pushed back expectations for when it would raise interest rates.
"The market is now stuffed with cash", Justin Haque, a pan-European trader at Hobart Capital Markets said. "There's going to be a switch that could last six months from food & beverage and other defensive shares into cyclicals and banks."
Shares in basic resources companies, which depend on global economic activity and benefit from rising metal prices when inflation rises, led gainers as they added 2.5 per cent.
By 8.03am Irish time the pan-European FTSEurofirst 300 index was up 1.2 per cent to 1,119.57 points, a level not seen since July 2011.
Reuters
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