EU STOCKS rose on Bernanke Testimony

European stocks rose, rebounding from their biggest drop in more than a week, as Federal Reserve Chairman Ben S. Bernanke said that the pace of the recovery will determine when the central bank reduces its asset purchases.

The Stoxx Europe 600 Index gained 0.6% to 297.04 at the close in London. It has still rallied 6.2% this year.

Federal Reserve Chairman Ben S. Bernanke said the pace of the Federal Reserve's bond purchases is not 'on a preset course', as it depends on the current economic and financial situation.

The Fed head assured that signs of recovery are visible in the US labor market, but that “the jobs situation is far from satisfactory, as the unemployment rate remains well above its longer-run normal level.” He also pointed out that inflation is still below the Fed's 2% target. That is why “a highly accommodative monetary policy will remain appropriate for the foreseeable future.”

Bernanke stressed that the decision on when the tapering should begin depends on the Fed's assessment of the US economic outlook. Should economic data improve earlier than forecasted and inflation rise towards the objective, a reduction could be carried out sooner. Otherwise, “the current pace of purchases could be maintained for longer.”

In the U.K., all nine members of the Bank of England’s Monetary Policy Committee voted against expanding the bond-buying program, according to the minutes of the July 3-4 meeting published today. MPC members Paul Fisher and David Miles dropped their call to expand asset purchases by 25 billion pounds ($38 billion) at Governor Mark Carney’s first meeting.

National benchmark indexes advanced: Germany’s DAX gained 0.7%, while France’s CAC 40 rose 0.6%, the U.K.’s FTSE 100 added 0.2%.

BHP Billiton, the world’s biggest mining company, gained 2% after setting a 13th annual output record. Iron-ore production rose to 47.7 million metric tons in the three months ended June 30, from 40.9 million tons a year earlier.

Rio Tinto Group and Glencore Xstrata Plc advanced 1.1% and 2.8%, respectively.

Thomas Cook increased 2.7% as UBS raised its rating on the stock to buy from neutral.

Unilever, which makes Dove soap, dropped 1.6%. Credit Suisse cut its rating on the stock to underperform, similar to a sell recommendation, saying the stock is expensive.

Smiths Group Plc dropped 1%. The maker of security scanners predicted that operating profit will fall short of its previous forecast by as much as 15 million pounds for the full-year ending in July. 

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