European stocks climb after dramatic drop

European stocks rose as the benchmark indexes Euro Stoxx 600 and Euro Stoxx 50 gained 0.38% and o.27%, respectively, rebounding from 1.5 year low.

Federal Reserve said it may start reducing bond purchase program at the end of the year if the economy strengthens in line with forecasts. Standard & Poor’s 500 Index futures climbed 0.8 percent, while the MSCI Asia Pacific Index gained 0.1 percent today.

“The Fed has more confidence in the momentum of the economy, there’s more distance between us and the financial crisis, and now is the right time to just start thinking about the normalization of policy,” Richard Jeffrey, chief investment officer at Cazenove Capital Management, told Manus Cranny on Bloomberg Television. “It’s trying to change market psychology to be more reliant on the real economy and on the outlook for company earnings.”

Greek stocks continued their longer than a year decline as the Greek interior minister, Antonis Manitakis, resigned after Democratic Left leader Fotis Kouvelis met with lawmakers from his party to decide whether to withdraw support from the coalition government amid disagreement over Prime Minister Antonis Samaras’s decision to close the nation’s public broadcaster.

The UKs benchmark FTSE 100 rose 0.56% at 13:40 pm in London trade. French CAC 40 index followed by 0.34% gain while DAX remained unchanged.

In corporate news, Bayer surged 1.9% after Goldman Sachs raised the rating on the maker of drugs and agricultural chemicals to “buy” from “neutral”, stating companys shares were underpriced at the moment.

Danone SA, added 3.9% after JP Morgan Chase & Co. raised the stock to “overweight”, similar to a “buy” rating, from “neutral”.