Europe close: Stocks push higher after ECB opens door to more stimulus
European stocks surged on Thursday, after the European Central Bank hinted at further stimulus measures
CAC 40
8,030.65
13:00 25/04/24
easyJet
539.80p
12:59 25/04/24
FTSE 100
8,097.69
13:00 25/04/24
FTSE 250
19,730.24
13:00 25/04/24
FTSE 350
4,447.22
13:00 25/04/24
FTSE All-Share
4,400.79
13:00 25/04/24
Travel & Leisure
7,601.88
13:00 25/04/24
Vivendi
€9.85
13:00 25/04/24
Xetra DAX
17,999.35
13:00 25/04/24
The benchmark Stoxx Europe 600 index closed 2.37%, France’s CAC 40 rose 2.17% and Germany’s DAX ended the session 2.68% higher.
ECB opens door to QE extension
European Central Bank President Mario Draghi on Thursday said further quantitative easing was not discussed at the latest policy meeting as estimates for economic growth and inflation were lowered.
Draghi said governing council members saw no need to consider raising asset purchases despite speculation to the contrary amid the volatility caused by China slowdown fears.
"Economic recovery is expected to continue albeit at slower pace due to weaker growth in emerging markets," Draghi said.
“The door is now clearly wide open to the ECB stepping up its near-term pace of Quantitative Easing and/or increasing its overall size and duration,” said Howard Archer, chief UK and European economist at IHS Global Insight.
“Whether the ECB steps through that door will clearly depend on whether Eurozone growth continues to struggle and inflation prospects deteriorate further.”
Meanwhile, the ECB maintained interest rates, the marginal lending facility and deposit facility at 0.05%, 0.30% and -0.20% respectively.
The euro plunged 1.27% against the yen, falling 0.92% and 0.44% against the dollar and the pound respectively, while Brent crude rose 2.26% to $51.67 a barrel.
Thursday data
On the economic data front, the final reading of Markit’s services PMI for the Eurozone came in at 54.4 for August, which was a little higher than the flash estimate of 54.3.
Retail sales figure from Eurostat were a little less encouraging, as volumes rose 0.4% month-on-month in July compared with a downwardly-revised 0.2% drop in the June and slightly short of expectations for a 0.5% rise.
Across the Atlantic, new unemployment claims rose by 12,000 to 282,000 in the last week of August, to reach the highest level in two months.
Meanwhile, the trade deficit fell 7.4% month-on-month in July to a seasonally adjusted $41.9bn compared with analysts’ expectations of $41.8bn.
There was positive news from the services sector, with the ISM non-manufacturing reading for falling to 59% in August compared with a 60.3% in July, but above expectations of a 58% reading.
In company news, Swiss agriculture company Syngenta gained 3.73% after it announced a $2bn share buyback and the sale of its vegetable seeds business.
Budget airline EasyJet surged 5.59% after lifting its end-year profit guidance as it said record passenger numbers in August offset higher costs.
The airline now expects pre-tax profit for the year to the end of September to be between £675m and £700m, up from a previous range of £620m to £660m.
On the downside, Vivendi nudged 0.14% lower after its second-quarter earnings missed analysts’ expectations.