Traders are pictured at their desks in front of the DAX board at the Frankfurt Stock Exchange yesterday. For the day, the DAX 30 rose 0.65% to 9,540 points.

AFP/London

European stocks rose yesterday after the new Federal Reserve chief said she would stick with stimulus and on a rare burst of good data from China.

London’s benchmark FTSE 100 index ended the day just 0.04% higher at 6,575.03 points.

Frankfurt’s DAX 30 rose 0.65% to 9,540 points and the CAC 40 in Paris climbed 0.52% to 4,305.5 points.

Markets rallied after Janet Yellen told the US Congress on Tuesday she expected to continue predecessor Ben Bernanke’s plan to wind down the Fed’s bond-buying gradually and keep interest rates low until the jobs market improves significantly.

“European equities are trading once again higher ... after new Fed chief Janet Yellen assured financial markets that she has no plans to change the direction taken by her predecessor Ben Bernanke,” said trader Markus Huber at broker Peregrine & Black.

“No rise in US interest-rates is imminent in the near future and ... the Fed will continue to stick to their monthly tapering plans.”

Investors were also lifted by Chinese data showing a better-than-forecast jump in exports in January.

Chinese exports jumped more than expected, increasing 10.6% to $207.13bn, while imports were up 10.0% at $175.27bn, according to Chinese government data.

“The market is still rising and good Chinese trade data published this morning helped support the trend since it was a welcome change from the stark bleakness out of China of the past 3 or 4 months,” said Alexandre Baradez, analyst at IG bank.

Wall Street was mostly lower yesterday after having posted gains of over one% the day before.

In midday trading, the Dow Jones Industrial Average slipped 0.35% to 15,938.96 points, the broad-based S&P 500 dipped 0.13% to 1,817.37 points, and the tech-rich Nasdaq Composite Index added just 0.02% to 4,191.80 points.

In foreign exchange trading, the European single currency slumped to $1.3591 from $1.3638 late in New York on Tuesday, penalised by data showing that eurozone industrial output fell by 0.7% in December, instead of a 0.3-percent drop expected by analysts.

“A sharper-than-expected 0.7% month-on-month drop in industrial production is a reminder of the fragility of the eurozone’s recovery and the tough job it is having in building up sustainable decent growth,” said economist Howard Archer at IHS Insight.

The British pound jumped to 81.98 pence to a euro and to $1.6578 after the Bank of England updated its economic forecasts for Britain.

“The initial reaction has been for markets to price in rate hikes earlier than was previously anticipated,” said analyst Simon Smith at FxPro.

Analysts at Berenberg bank said that the BoE forecasts is consistent with a first rate hike in the second quarter of 2015, instead of late 2016.

“Given that past BoE forecasts have been so spectacularly wrong, we remain comfortable forecasting the first hike for Q1 2015,” said Berenberg Chief UK Economist Rob Wood.

The price of gold rose to $1,289.50 an ounce on the London Bullion Market, from $1,282 on Monday.

In company news, shares in French bank Societe Generale led the CAC 40 index with a gain of 4.7% to 46.35 euros on nearly tripled 2013 net profit.

In London, Standard Chartered bank won 1.89% to 1,294 pence on the announcement it was looking to sell its Swiss private banking unit.