European shares rise after positive stress test of US banks

EUROPEAN shares rose early on Wednesday to reach fresh 33-week highs, led by financials as the U.S. Federal Reserve improved its economic outlook for the world’s largest economy and said most U.S. banks had passed its stress tests.

European Banks climbed 1.2 percent after the Fed’s conservative stress tests showed most banks achieved high grades, paving the way for higher payouts and reassuring investors about the solidity of the global banking system.

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“U.S. stress tests could be said to show that the worst is over for the American financial system and many banks can now

offer a decent dividend and return cash to shareholders,” Darren Sinden, senior sales trader at Silverwind Securities, said.

At 0810 GMT the FTSEurofirst 300 index of top European shares was 0.5 percent higher at 1,110.64 points, after closing at a seven-and-a-half-month high on Tuesday.