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Fed testimony aids European shares recovery
July 17, 2013 / 3:42 PM / 4 years ago

Fed testimony aids European shares recovery

LONDON, July 17 (Reuters) - A tumultuous session saw European shares close higher on Wednesday, bolstered by reassurances from the U.S. Federal Reserve that it will be flexible in its stimulus-trimming plans.

The FTSEurofirst 300 provisionally closed up 7.15 points, or 0.6 percent at 1,198.30 as the comments from Fed Chairman Ben Bernanke helped the market recover from the blow of Bank of England committee voting 9-0 against extending the bank’s bond-buying programme, known as “quantitative easing” (QE)

European shares, however, are still down 4.6 percent from levels hit on May 22, when volatility -- a gauge of investor fear -- increased on worries over the Fed scaling back stimulus.

“Volatility will rise from the levels we saw before May 22 and stay higher until investors become more comfortable with what the change of policy will mean. Until then you can expect more noise and higher risk,” Gurvinder Brar, head of global quantitative research, at Macquarie Securities, said.

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