HONG KONG - European stocks jumped, leading gains in global benchmarks Thursday after Greek lawmakers approved an austerity bill needed for another bailout. The dollar rose after the Fed chief indicated that U.S. interest rates could start rising later this year.
Germany's DAX leaped 1.5 percent to 11,715.69 and France's CAC 40 surged 1.6 percent to 5,127.09. Britain's FTSE 100 rose 0.6 percent to 6,793.61. U.S. stocks were poised to open higher, with both Dow and broader S&P 500 futures up 0.4 percent.
In a late-night vote, lawmakers overwhelmingly approved a strict austerity bill that creditors demanded in order to begin negotiations on a new bailout package worth about 85 billion euros ($93 billion) for the debt-stricken Mediterranean country. Prime Minister Alexis Tsipras insisted the deal was the best he could come up with to avoid Greece defaulting and leaving the euro currency.
In comments to lawmakers, Federal Reserve Chair Janet Yellen gave an optimistic assessment for the world's biggest economy. She said the economy is reviving after a harsh winter and said the U.S. central bank could start raising interest rates before the end of the year if improvements stay on track. However she also said rates will remain at very low levels "for quite some time after the first increase." Years of easy credit has boosted global stock markets but the looming possibility of a rate hike is tempting investors to pull out of shares.
"There was no surprise from Janet Yellen's testimony to Congress, but it was a 'get with the program' wake up call to the global markets, telling them they've been watching the wrong events. The Greek and Chinese navel-gazing has to end," said IG market strategist Evan Lucas. He said investors and commentators have been overlooking "the biggest macro point of the year: The Fed is going to lift the Feds funds rate this year for the first time since July 2006."
The euro fell to its lowest level since the beginning of June, slipping to $1.0908 from $1.0954 in late trading Wednesday. The dollar was flat at 123.92 yen.
Japan's Nikkei 225 rose 0.7 percent to close at 20,600.12 and South Korea's Kospi added 0.7 percent to 2,087.89. Hong Kong's Hang Seng gained 0.4 percent to 25,162.78 and the Shanghai Composite Index in mainland China gained after two days of big drops, climbing 0.5 percent to 3,823.18. Australia's S&P/ASX 200 gained 0.6 percent to 5,669.60.
Oil rebounded from a sharp drop triggered by a report on U.S. supplies that showed a smaller-than-expected decline last week. Benchmark U.S. crude rose 31 cents to $51.70 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.63, or 3 percent, to close at $51.41 a barrel on Wednesday. Brent crude, a benchmark for international oils, rose 59 cents to $57.71 a barrel in London.