Stock Market

European stocks surge 2.9%; Volkswagen scandal, Fed in focus

European stocks opened sharply higher on Friday as concerns over the health of the global economy dimmed slightly after US Federal Reserve Chair Janet Yellen suggested the central bank is still on course to raise interest rates this year.

The pan-European STOXX 600 was 2.9 percent higher at the open.

London’s FTSE 100 was up over 2.3 percent, the German DAX rose 2.6 percent and the French CAC saw a 3 percent pop.

Further clarity on the direction of US monetary policy prompted Asian stocks to lose steam overnight, continuing a lackluster lead from Wall Street Thursday.

In a speech on Thursday, Yellen said that an interest-rate hike “sometime later this year” would likely be appropriate, though the decision hinges on economic data. She was speaking at the University of Massachusetts.

Autos, Miners surge

Volkswagen shares were up around 1.7 percent ahead of a decision on the company’s next chief executive which is expected to be announced at the embattled carmaker’s supervisory board meeting on Friday. Former chief executive Martin Winterkorn resigned on Wednesday following the scandal surrounding the emissions of its diesel cars. VW is accused of using software to change its diesel engines’ performance under US test conditions.

The auto sector was one of the top performers on Friday in Europe. German carmaker BMW saw shares up around 4.8 percent after its shares were hammered Thursday following a report in magazine Auto Bild that the company could also be involved in emissions manipulation. The publication later backtracked on its claim and BMW denied any wrongdoing. Renault, Daimler and Fiat Chrysler were all sharply higher.

Mining stocks rebounded on Friday after coming under pressure Thursday as the oil price continued to remain weak. London-listed Glencore was up over 4.5 percent with the likes of Anglo American and Antofagasta deep in positive territory.

There were just a handful of stocks in the red with power generator supplier Aggreko down 2.7 percent after HSBC slashed its price target for the company’s shares.

Shares in Germany’s Deutsche Bank were up 1.9 percent despite the company being ordered to face a U.S. government lawsuit that is seeking to recoup more than USD 190 million over alleged tax fraud.

Adidas shares were up 3.3 percent after the sportswear maker got a boost from better-than-expected sales from Nike in the three months to August 31.

In other news, at least 717 pilgrims from around the world were killed on Thursday in a stampede outside the Muslim holy city of Mecca, Saudi authorities said. The latest disaster is one of several to occur during the annual hajj pilgrimage over the last 25 years, prompting questions about whether the Saudi Arabian authorities can cope with the number of pilgrims converging there.

There are no major data or earnings released Friday.