European stocks were set to climb on Friday, mirroring a surge on Wall Street where the Dow posted its best one-day rise in three years and extended a rally sparked by the US Federal Reserve’s commitment to take a “patient’’ approach towards raising interest rates.

At 0710 GMT, futures for Euro STOXX 50, Germany’s DAX and for France’s CAC were up 0.9-1.1 per cent.

The Dow Jones industrial average rose 421.28 points on Thursday, or 2.43 per cent, to 17,778.15, the S&P 500 gained 48.34 points, or 2.4 per cent, to 2,061.23 and the Nasdaq Composite added 104.08 points, or 2.24 per cent, to 4,748.40.

The gains came even as oil prices stayed under pressure, suggesting equity investors were beginning to see the positives in lower fuel costs and increased consumer spending power.

“The drop in oil price has recently put pressure on the equity market. However, (there is) historical evidence that a fall in oil price is a positive for equities, with a clear acceleration in performance after six months,’’ Roland Kaloyan, head of European equity strategy at Societe Generale, wrote in a note.

Italy’s banking shares will be in focus after Standards and Poor’s cut its ratings on a number of Italian lenders on Thursday, including UniCredit and Intesa Sanpaolo, citing rising economic risks and a recent downgrade of Italy’s sovereign rating.

Greek stocks will also be eyed after the leader of Syriza said his radical leftist party will cancel austerity and ask Europe to erase a big chunk of Greek debt, but also said he was committed to keeping Greece in the euro and keeping the budget balanced before debt costs.

Fears among investors that Greece is heading for an early national election that will bring Syriza to power have sent Greek stocks and bonds crashing in recent weeks, with Athens’ ATG index sinking 20 per cent last week.

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