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European shares rise as Yellen reassures

Blaise Robinson
Tuesday, 11 Feb 2014 | 10:20 AM ET

* FTSEurofirst 300 up 0./ XX pct, Euro STOXX 50 up 0./ pct

* Yellen says labour market recovery is "far from complete"

* L'Oreal sinks as stake buyback impact disappoints

PARIS, Feb 11 (Reuters) - European stocks rose on Tuesday, boosted by positive corporate results and as new Federal Reserve Chair Janet Yellen acknowledged the U.S. labour market recovery was "far from complete".

In her first public comments as Fed chief, Yellen said the Fed would continue to trim stimulus in "further measured steps at future meetings" if economic data broadly supports its expectation of improved labour markets and a rise in inflation.

At 1455 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 percent at 1,311.29 points, while the euro zone's blue-chip Euro STOXX 50 index was up 0.8 percent at 3,057.46 points.

The U.S. central bank has trimmed its asset purchases twice since December, encouraged by momentum in the economy in late 2013. But after mixed macro data including Friday's lower-than-expected payrolls and turmoil in emerging markets, investors had been seeking clarification from the Fed.

"Yellen is in line with Bernanke's approach, it brings visibility on the Fed's action and we now know where they are going. This is quite reassuring for investors," said David Thebault, head of quantitative sales trading at Global Equities.

Around Europe, Britain's FTSE 100 index was up 0.8 percent, Germany's DAX index up 1.4 percent, and France's CAC 40 up 0.5 percent.

Shares in car makers Volkswagen and BMW gained about 2 percent, after positive January sales figures.

French media group Lagardere surged 4.3 percent after raising its profit forecast for fiscal 2013.

"So far in the earnings season, operational results have been good, which shows that business models are solid. However, net results have suffered from currency swings," State Street global Advisors fund manager Olivier Ekambi said.

Shares in European companies with a big exposure to emerging markets have been hammered recently, hurt by fears that sharp moves in local currencies could have a negative impact on their revenues.

Bucking the trend on Tuesday, UK lender Barclays dropped 4.1 percent after saying it would axe up to 12,000 jobs this year even as it raised bonuses for investment bankers. That prompted fury among politicians and unions who said it had not learned the lessons of the financial crisis.

Shares in L'Oreal fell 3.2 percent after initially rising, on disappointment about the level of earnings boost from the group's plan to buy back 8 percent of its own shares from Nestle.

Europe bourses in 2014:

Asset performance in 2014:

Today's European research round-up

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