EUROPE MARKETS: European Stocks Log Highest Close Since 2015 After Dutch Election

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03/16/2017 | 06:30 pm

By Carla Mozee and Sara Sjolin, MarketWatch

Stoxx 600 at around its highest since December 2015

European stocks leapt to their strongest levels in more than a year Thursday, buoyed by a rally in mining shares, and after Dutch voters rebuffed Geert Wilders's far-right party in a general election.

The Stoxx Europe 600 index climbed 0.7% to end at 377.73, its highest close since December 2015, FactSet data showed. The pan-European index on Wednesday finished up by 0.4% .

In Amsterdam, the AEX climbed 0.6% to 514.53, logging its best close since January 2008. The move came after the far-right Party for Freedom, led by Wilders, fell short in the Netherlands general election . Preliminary results released late Wednesday showed that the Dutch political establishment was set to hold on to power.

The election was seen as a litmus test for the vigor of rising populist movements in Europe. The Party for Freedom wanted to leave the European Union and halt Muslim immigration.

The "Dutch election results revived hope that the populist movement may have not spilled over the core European Union members. It especially revived faith that Marine Le Pen's Front National could experience a similar rattle on the upcoming French elections," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in a note.

"The euro/dollar rallied on the sweet combination of Dutch election results and the Fed announcement," she said. "We remind that the downside euro risks prevail on the run up to the first round of the French election due on April 23rd."

The euro surged to a one-month high late Wednesday after the preliminary results were released. The shared currency on Thursday bought $1.0736, little-changed from late Wednesday in New York.

The Federal Reserve late Wednesday raised interest rates, as expected, and Fed Chairwoman Janet Yellen signaled the central bank will stick to a gradual pace of raising interest rates .

Miners: Anglo American PLC (AAL.LN) shares climbed 8.6% after billionaire Anil Agarwal's family trust, Volcan Investments Ltd., bought a 12% stake in the producer of iron ore, copper and other metals.

The mining sector was also aided by a pullback in the dollar in the wake of the Fed decision, with dollar-denominated metals prices rising.

Indexes: Germany's DAX 30 index rose 0.6% to 12,083.18, and France's CAC 40 added 0.6% at 5,013.38.

The FTSE 100 rose 0.6% to 7,415.95, for a record close . The pound jumped above $1.23 after the Bank of England voted 8-1 to hold the key rate at 0.25%, with the hawkish dissent driving sterling higher .

Other developments: A letter sent to the International Monetary Fund in Paris exploded, injuring a staff member . The IMF is working with French authorities who are investigating the incident.

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