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Europe: Shares advance on "patient" Fed, Tesco rallies
[LONDON] European shares rose on Thursday as a strong Christmas update from Britain's Tesco boosted retailers and Federal Reserve minutes showed it was not in a hurry to start raising rates.
The FTSEurofirst 300 index of top European shares was up 1.8 per cent at 1,354.61 points by 1154 GMT. The index remains down around 1 per cent since the start of 2015.
Retailers led the bounce on Thursday, with the STOXX Europe 600 Retail index up 2.6 and Tesco 10 per cent higher after it reported better-than-expected sales in the six-week Christmas period and unveiled plans to sell assets and cut hundreds of millions of pounds of costs. "Four Christmases and four profit warnings later, it seems Tesco has turned the corner," Manish Singh, head of investment services at Crossbridge Capital, said.
However, Marks & Spencer fell 4.3 per cent after posting a bigger-than-expected 5.8 per cent drop in underlying sales of clothing, gifts and homeware over Christmas.
Broadly, the market got support from the Fed minutes. The central bank pressed ahead with its plans to begin raising interest rates later this year, but Fed officials said they could be "patient" in deciding when to begin the process.
Among other movers, Standard Chartered rose 2.6 per cent. The bank is closing the bulk of its global equities business and axing 4,000 retail banking jobs to aggressively cut costs, according to a memo seen by Reuters.
Greek stocks lagged once again, falling 1.4 per cent after the European Central Bank said Greek banks' access to ECB funding beyond February would depend on Athens successfully completing a final bailout review and reaching a deal on a follow-up plan with its EU/IMF lenders.
The statement was the clearest warning yet that Athens cannot expect to rely on ECB funding if it reneges on its obligations under the 240 billion euro bailout programme, a risk that has grown as Greece prepares for snap polls on Jan 25.