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World stocks higher ahead of Janet Yellen testimony

Feb 11 2014, 14:48 IST
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Investors will see Janet Yellen in the public spotlight for the first time as she testifies before Congress later Tuesday. Reuters Investors will see Janet Yellen in the public spotlight for the first time as she testifies before Congress later Tuesday. Reuters
SummaryInvestors will see Janet Yellen in the public spotlight for the first time as she testifies before Congress later Tuesday.

Global stocks were higher Tuesday as investors waited for the new Federal Reserve chief's testimony to Congress, which might give clues to how quickly the U.S. central bank will withdraw its economic stimulus.

In Europe, Britain's FTSE 100 rose 0.8 percent to 6,642.44 and Germany's DAX gained 1.1 percent to 9,388.34. The CAC-40 in France rose 0.8 percent to 4,269.34. Wall Street was set for gains, with Dow futures and S&P 500 futures both up 0.4 percent.

Investors will see Janet Yellen in the public spotlight for the first time as she testifies before Congress later Tuesday. Markets are waiting to see if she will consider a pause in cutting monetary stimulus because of weaker hiring by U.S. employers in the past few months.

The Labor Department reported that jobs created in January were far below market expectations, after a poor report in December. However, the unemployment rate has fallen to its lowest since late 2008 and some have dismissed the poor payrolls report as caused by a spell of severe cold weather.

"We expect questions on the pace of stimulus reduction as well as exit measures, but do not expect Yellen to say anything beyond what the Fed has already communicated,'' Mizuho Bank said in a commentary. "Rather, we would focus on how upbeat or not her assessment of the U.S. economy is.''

The Fed had been buying $85 billion worth of bonds every month in an effort to stimulate the economy by pushing down commercial lending rates. February's purchases would be $65 billion if the Fed sticks to its plan to reduce the stimulus.

Earlier in Asia, China's Shanghai Composite added 0.8 percent to 2,103.67 and Hong Kong's Hang Seng jumped 1.8 percent to 21,962.98. Australia's S&P/ASX 200 gained 0.6 percent at 5,254.50. Japan's market was closed for a public holiday. Singapore, Seoul, Bangkok and Jakarta all rose.

Benchmark U.S. oil for March delivery was up 20 cents to $100.26 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 18 cents on Monday to close at $100.06.

The euro rose to $1.3673 from $1.3646 late Monday. The dollar rose to 102.30 yen from 102.18.

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