Bourses buoyed by the Fed’s monetary policy move

The Spanish stock market and the rest of the European bourses enjoyed a good day on Thursday after the US Federal Reserve announced it would gradually phase out its monetary stimulus program.

Spain’s blue-chip Ibex 35 index gained 2.34 percent to 9,664.30 points. The Dax in Frankfurt was up 1.68 percent, while the CAC 40 climbed 1.64 percent.

While investors had previously fretted about the Fed withdrawing its quantitative easing measures, the US central bank’s announcement on Wednesday that it would reduce the amount of bonds it purchases on a monthly basis by 10 billion dollars to 75 billion was met this time around with good cheer as it was taken to indicate that the US economy is well on the mend.

The Spanish Treasury also had a satisfying day at its last bond auction for the year, which attracted heavy demand. The debt-management arm of the Economy Ministry sold 2.542 billion euros in five- and 10-year bonds, slightly above its target of 2.5 billion.

The 10-year tranche attracted bids worth 3.61 times the amount sold, which Bloomberg said was the highest bid-to-cover ratio since at least 2004 when it began compiling the data.

Yields also fell. The average rate on the five-year bond declined to 2.697 percent from 2.722 percent at an auction held earlier this month, while the yield on 10-year paper declined to 4.098 percent from 4.164 percent.