News Column

European stocks rally after ECB and BOE decisions,

February 6, 2014



European stock markets bounced Thursday after European Central Bank Mario Draghi reaffirmed that the bank still has plenty of tools to handle the economy -  Stoxx      600   gained 1.49 percent or 4.73 points to  322.77 , the highest closing level in a week. -  Stoxx 50   gained 1.63% to  3010.79 . As of 04.02 a.m. EST. Central-bank meetings were the focal point for Thursday's action. The European Central Bank left its main refinancing rate unchanged   at a record low of 0.25%, leaving some analysts surprised. Economists were split ahead of the rate call as to whether the ECB would lower rates even further in response to low inflation and tighter money-market conditions. Some argued a rate cut would be premature, while others believed the central bank was keen to be ahead of the curve on inflation and therefore would ease policy further. During the following news conference ECB President Mario Draghi addressed the inflation concerns, but indicated he wasn't worried about deflation. Instead, he explained that the low inflation partly currently is due to low energy and food prices, which benefit consumers and usually don't turn into deflation. He stressed, however, that the ECB remains ready to take "decisive action" if needed. Earlier in the day, the Bank of England left the size of its bond-buying program unchanged and held its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($611 billion).  Corporate News Among notable movers, shares of Daimler added 2.6% after the German car maker said it closed out 2013 with record earnings and gave an upbeat outlook for 2014. Shares of Vodafone picked up 3.7% after the telecoms firm reported a narrower-than-expected fall in third-quarter revenue. Akzo Nobel NV rallied 6.5% after the Dutch paint and coatings firm said it will continue to work on cutting costs to offset expected soft demand in the year ahead. Danske Bank AS climbed 3.7% after the Danish lender proposed paying a dividend for the first time in five years.   -The British  FTSE 100   gained 1.55% or 100.39 points to  6558.28 -The French  CAC 40   gained 1.71% or 70.31 to  4188.10 -Frankfurt's  DAX 30   gained 1.54% or 140.26 points to  9256.58


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Source: ICN.com Financial Markets


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