Global Markets Rebound on Yellen Speech

Global stock markets climbed Friday after Federal Reserve Chairwoman Janet Yellen eased investors' concerns that last week's decision to keep rates near zero had put off a rate rise for the foreseeable future.

In a speech on Thursday at the University of Massachusetts in Amherst, Ms. Yellen laid out a detailed case for raising interest rates later this year.

European markets climbed sharply at the open, rebounding from Thursday's losses. The Stoxx Europe 600 was 2.5% higher in early trade.

The picture in Asia was more mixed. Japanese stocks wavered as investors digested Ms. Yellen's speech, but finished the session strongly, with the Nikkei closing up 1.8%. China's Shanghai Composite fell 1.6%.

Stock markets were "seemingly taking a little heart from less obfuscation from Yellen," said Marc Ostwald, a strategist at strategist at ADM Investor Services International.

Shares around the world have fallen since the Fed stood pat last Thursday, with investors interpreting the central bank's caution as the latest worrying sign about the state of the global economy. Many are anxious for the Fed to make a start on returning monetary policy to normal after years of rock-bottom rates.

Ms. Yellen's speech also gave the dollar a boost. The euro weakened to $1.1140 against the buck, having climbed to nearly $1.13 on Thursday. The dollar climbed against the yen to ¥ 120.66.

Higher interest rates make a currency more attractive to investors.

In Europe, shares in the auto sector led Friday's rebound. A number of car makers had fallen sharply on Thursday as the emissions scandal enveloping Volkswagen AG threatened to spread.

BMW AG climbed more than 5%, Daimler AG rose 4%, while Volkswagen itself was 2.5% higher.

Energy and mining shares also bounced back after heavy losses.

In commodity markets, Brent crude oil was 0.4% higher at $49.06 a barrel. Gold fell 0.7% to $1,145.50 a troy ounce.

Write to Tommy Stubbington at [e-mail]

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September 25, 2015 04:15 ET (08:15 GMT)

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