European Stocks Climb to Post Biggest Weekly Gain Since February

European stocks extended a third weekly increase, amid optimism that the economy is strong enough to withstand higher U.S. borrowing costs, as traders awaited a speech by Federal Reserve Chair Janet Yellen.

The Stoxx Europe 600 Index added 0.2 percent at the close of trading in London, taking its advance to 3.4 percent for the week. The number of shares on the gauge changing hands was about 20 percent lower than the 30-day average, before holidays in the U.K. and U.S. on Monday.

European shares posted their best weekly gains since February, resuming a rally that had stalled after a 16 percent rebound from a low that month. After hawkish comments from Fed officials, traders increased the chances of an interest-rate increase in June to 30 percent and to 54 percent for July. Data showed the U.S. economy in the first quarter expanded at a slightly faster pace than initially estimated, and Yellen is due to speak on Friday after the close of European markets.

“The markets have been prepared and have had time to price it in,” said Otto Waser, head of investment research at R&A Group Research & Asset Management in Zurich, referring to a potential rate increase. “A Fed rate hike doesn’t change anything but gives more confidence that the U.S. economy is on track.”

Read about world leaders discussing global growth here.

The region’s benchmark gauge posted its longest streak of weekly gains since March and closed 0.3 percent away from its April 20 high. On Friday, steelmaker Voestalpine AG climbed 2.7 percent after Berenberg wrote in a note that the company is benefiting from strength in the auto industry. Roche Holding AG led gains among health-care companies, up 4 percent, after its Genentech unit reported positive drug results.

Satellite-services provider SES SA slumped 10 percent after a stock offering. Banco Popular Espanol SA fell for a second day, extending a record low, after its biggest slump since 1999 following a share sale.