European stocks rally after Bernanke's speech

Europe's main stock markets rose strongly at the start of trading on Thursday after the Federal Reserve indicated that it was in no rush to end its stimulus programme. London's benchmark FTSE 100 index was up 26.05 points or 0.40 percent at 6,531.01 points at 11:29 am, while Frankfurt's DAX 30 jumped 1.43 percent to 8,163.56 points and in Paris the CAC 40 gained 1.17 percent to 3,885.57. Asian stocks also rallied after US Federal Reserve boss Ben Bernanke said that its stimulus drive would be kept in place "for the foreseeable future". Bernanke on Wednesday insisted the Fed's easy-money policy was still necessary, because the unemployment rate at 7.6 percent was still too high and inflation was too low for comfort. "Both the employment side and the inflation side are saying that we need to be more accommodating," he said, answering questions after a speech. "Moreover, the other portion of macroeconomic policy, fiscal policy, is now actually quite restrictive... Put that all together, I think you can only conclude that highly accommodative monetary policy for the foreseeable future is what's needed in the US economy," he said. He added that the full impact of deep government spending cuts put in place in March was yet to be seen. The comments came hours after minutes from the bank's latest policy meeting suggested it would move more rapidly toward winding up the $85-billion-a-month stimulus. Currency traders immediately sold the dollar, betting that interest rates would remain low for a long time to come.