European share values jump half a per cent in response to rate cuts by ECB
Faced with signs of further deterioration in the eurozone's prospects, the central bank cut all of its interest rates by another 10 basis points to new record lows, putting its deposit rate further into negative territory.
European stock values jumped around half a per cent in response, while the euro sank as much as a cent on the day.
"It's a surprise. Euro/dollar is getting slammed. The DAX should go up from here," said
Sources familiar with the ECB's discussions told Reuters that officials had also been looking at plans to launch an asset-backed securities (ABS) and covered bond purchase programme worth up to €500 billion. The first such purchases, if approved, could be made this year.
Nothing on the asset purchase programme was announced with the bank's regular policy statement on interest rates at
"If it turned out to be true, the market would be delighted to see the ECB move in the direction of ABS purchases,"
European share markets, after falling in early deals, were up across the board. Spanish, French and Portuguese stocks all gained almost a full percentage point , while
That pushed the blue chip FTSEurofirst index up 0.7 per cent on the day.
The euro, already suffering from expectations of more policy loosening by the ECB, fell to a session low of
A month-long march higher for European and Asian stock markets had stalled earlier in the day on concerns the bank would do nothing immediate at the September meeting to address a deteriorating economic outlook.
With economies across
The US Federal Reserve is on the verge of halting its own programme of bond-buying, encouraged by a steady stream of reasonably encouraging signs on jobs and growth on the other side of the Atlantic.
But the jury is still very much out on when it can raise interest rates although the ADP jobs report later on Thursday, followed by nonfarm payrolls on Friday, should advance the argument.
Swiss asset managers
"European stocks have been upgraded as liquidity conditions are improving and positioning has turned lighter as investors have shunned the asset class for the past few months," said
"Valuations look less extended."
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