News Column

European Stocks Rally As ECB Offers Stimulus, UK Shares Lag

September 4, 2014

BRUSSELS (Alliance News) - European stocks surged higher Thursday after the European Central Bank finally took major steps aimed at jump-starting the region's sluggish economy.

The ECB announced two new programs under which it will buy asset-backed securities and covered bonds.

Along with the quantitative easing, the ECB unexpectedly offered three interest rate cuts, dropping its benchmark rate to 0.05% from 0.15%.

Both the marginal lending rate and the deposit rate were also cut by 10 basis points.

The news prompted a rally in equities as the euro currency dropped to its lowest in more than 14 months against the dollar.

Banking stocks, particularly in Spain and Italy, led the way.

The Euro Stoxx 50 index of eurozone bluechip stocks jumped 1.77% to its highest in seven weeks.

The German DAX gained 1%, the CAC 40 of France rose 1.61%, but UK shares lagged after the Bank of England stood pat on interest rates. The FTSE 100 rose 0.05%.

Infineon Technologies eked out a fractional gain after the European Commission Wednesday imposed fines totaling 138.05 million euros on four firms including Infineon and Philips.

The regulator found that the firms coordinated their market behavior for smart card chips in the European Economic Area, in breach of EU rules that prohibit cartels.

Bilfinger tumbled 10% after issuing its third profit warning in recent months.

Technip was up 0.9% after announcing a contract win in Kochi, India.

In London, Standard Life surged 8%. The company announced a return of 1.75 billion pounds to shareholders.

Standard Life also said it would be selling its Canadian business to Manulife Financial Corp. for about CAD4 billion (USD3.7 billion).

Imperial Tobacco gained 2.6%. Jefferies raised its price target on the stock.

BP shares fell 6% as crude oil prices fell.

Swiss drug maker Roche said that Arthur Levinson had resigned from its board of directors with immediate effect. Shares were down fractionally.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Alliance News

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters