European stocks rebound on Fed comments

European stocks advanced Tuesday following an earlier rebound in Asia and after Wall Street closed within sight of a record high, as the Federal Reserve reaffirmed its aggressive stimulus policy. London's FTSE 100 index of top companies rose 0.71 percent to 6,390.56 points in late morning deals, Frankfurt's DAX rallied 1.48 percent to 7,805.79 points and in Paris the CAC 40 jumped 1.15 percent to 3,752.57. Madrid gained 0.88 percent to 8,320.30 points and Milan advanced 1.48 percent to 15,771.19 points, despite ongoing political limbo in Italy in the wake of last week's elections. In foreign exchange activity, the euro firmed to $1.3058 from $1.3024 late in New York on Tuesday. Gold prices rose to $1,580.42 an ounce on the London Bullion Market from $1,574.25. "Despite continued lousy economic data, from Europe in particular, investors continue to take comfort from the fact that the Federal Reserve looks set to keep its foot hard on the stimulus pedal," said Michael Hewson, analyst at CMC Markets trading group. Janet Yellen, vice chairwoman of the Fed board of governors, said in a speech that the central bank intends to "keep monetary policy highly accommodative until well into the recovery". In reaction, New York's Dow index rose 0.27 percent on Monday to finish at 14,127.82 points, within 40 points of an all-time high that was last seen in October 2007. Traders appeared to shrug off the lack of action in Washington on dealing with $85 billion of US federal spending cuts that came into effect on Friday and which could shave around 0.5 percentage points off growth. "The markets continue to consolidate around their highs... and remain supported by the prospect that whatever happens from a macro perspective, central banks will remain as a backstop in case they are needed to pump more money into the system," said analyst Angus Campbell at traders Capital Spreads. In company news, Standard Chartered's share price rallied 2.76 percent to 1,829.1 pence after the British-based emerging markets bank said it experienced good momentum so far this year, despite posting flat 2012 profits. The bank said net profits came in at $4.79 billion last year, compared to $4.75 billion in 2011, even after it was slapped with a huge fine for violating US sanctions on Iran and three other countries. While income rose eight percent to $19.07 billion, the lender was hit by the $667-million fine it was forced to pay US authorities last year to settle charges it violated US sanctions. "2012 has been an interesting year for Standard Chartered, though it bows out in style posting a tenth consecutive record year of income and profits," noted Investec bank analyst Ian Gordon. Asian equity markets also climbed on Tuesday, rebounding from a sell-off in the previous session, with Shanghai leading the rebound as China's annual parliamentary gathering kicked off. The Shanghai stock market jumped 2.33 percent, reversing some of its 3.65-percent dive on Monday, when property and construction stocks were hit after the government set out rules aimed at capping house prices. But eyes were on China's National People's Congress (NPC), which opened Tuesday with outgoing Premier Wen Jiabao saying the government would target growth of 7.5 percent for the world's number two economy in 2013 and 3.5 percent inflation. Elsewhere in Asia, Hong Kong rose 0.10 percent, Tokyo added 0.27 percent and Seoul advanced 0.17 percent, while Sydney jumped 1.29 percent in value.