By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Europe’s benchmark stock index was on track for a fifth straight day of gains on Friday, as encouraging comments from the U.S. Federal Reserve continued to support markets, although worries over spiking yields in Portugal capped gains.
The Stoxx Europe 600 index XX:SXXP +0.07% rose 0.1% to 296.77, eyeing a 2.9% weekly gain.
Among the biggest advancers in the index, shares of Invensys PLC IVNSF +4.30% surged 15% to ÂŁ5.08 a share after the software firm said it had received an indicative offer from Schneider Electric SA FR:SU -4.74% of ÂŁ5.05 a share. Shares of Schneider Electric SA dropped 3.8%.
Drug makers were also among gainers, with GlaxoSmithKline PLC UK:GSK +0.43% GSK -0.15% up 0.5% in London and Roche Holdings PLC CH:ROG +0.95% 1% higher in Zurich.
European stock markets built on gains seen on Thursday, when dovish comments from Fed Chairman Ben Bernanke sent global markets rallying. Bernanke said late Wednesday that short-term interest rates would stay low even when unemployment reaches 6.5%. Additionally, he said loose monetary policy is needed for the foreseeable future.
“We’re seeing steady momentum dripping through on the back of reassurance from Bernanke,” said Victoria Clarke, economist at Investec Securities.
“Initially what we heard from the Fed was that it was moving closer to the exit, and it sparked worries that other central banks could do the same. It generated some worries for European markets in the sense that the [European Central Bank] might also be moving to exit its easing policies, so it has reassured stocks that U.S. policy will continue to be supportive,” she added.
“Low interest rates are good for the housing market, but should also support the trend to more-normal lending levels.”
U.S. stocks rallied in Thursday’s trade, and traded mostly higher on Friday.
Back in Europe, Portuguese yields jumped above the 7% level, after the “troika” of international lenders agreed to push back the next review of the country’s 78 billion-euro ($102 billion) bailout program amid political instability.
The yield in 10-year benchmark Portuguese government bonds PT:10YR_PORT +9.19% spiked 71 basis points to 7.42%.
The PSI 20 stock index PT:PSI20 -0.75% traded 0.8% lower at 5,379.66.
In Spain, shares of Promotora de Informaciones SA ES:PRS -11.36% sank 11% after The Wall Street Journal reported late Thursday that the media company is considering filing for Chapter 11 bankruptcy protection in the U.S. A representative from Prisa, as the company is known, was not immediately available to comment.
Utility firms were also lower as an overhaul of Spain’s energy market was expected to be passed later in the day, according to media reports. Shares of Iberdrola SA dropped 3.6% and Endesa SA ES:ELE -3.79% lost 4.2%.
The benchmark IBEX 35 index XX:IBEX -2.49% slumped 2.7% to 7,813.50.
French stocks were also under selling pressure amid rumors Standard & Poor’s Ratings Services will downgrade the country over the weekend. A representative from S&P declined to comment. The CAC 40 index FR:PX1 -0.31% traded 0.5% lower at 3,848.88.
In London, mining firms were under selling pressure after China’s Finance Minister Lou Jiwei suggested his nation’s economy will fall short of its targets. Miners are sensitive to growth indications from China as the country is a major user of natural resources.
Rio Tinto PLC UK:RIO -1.04% AU:RIO +1.09% RIO -2.68% dropped 1.3%, and Anglo American PLC UK:AAL -2.84% fell 3.2%.
The FTSE 100 index UK:UKX +0.18% UK:UKX +0.18% traded marginally higher at 6,544.20.
Germany’s DAX 30 index DX:DAX +0.57% rose 0.4% to 8,193.98.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
