Europe’s main stock markets rallied Tuesday after an ECB executive board member signalled that the eurozone central bank would temporarily ramp up its stimulus programme, the AFP reported.
In the eurozone, the benchmark CAC 40 index of top companies in Paris soared 2.09 per cent to close at 5,117.30 points, while Frankfurt’s DAX 30 surged 2.23 per cent to 11,853.33 points compared with the close on Monday.
London’s benchmark FTSE 100 index ended the day up 0.38 per cent at 6,995.10 points, with gains tempered by news that British inflation fell into negative territory for the first time since 1960.
In foreign exchange, the euro sank to $1.1152 down from $1.1315 late in New York on Monday.
“Equity markets are ecstatic over the news that the ECB will front-load its bond buying scheme, and the short-term boost to the QE scheme has driven stock markets around Europe higher,” said analyst David Madden at trading firm IG.
ECB member Benoit Coeure, speaking at a conference in London on Monday, declared that the bank would purchase more assets than previously planned in May and June under its multi-billion-euro quantitative easing stimulus programme, owing to an expected market slowdown in the summer months.
“We are … aware of seasonal patterns in fixed-income market activity with the traditional holiday period from mid-July to August characterised by notably lower market liquidity,” he said.
He added that the ECB is “moderately front-loading its purchase activity in May and June, which will allow us to maintain our monthly average of €60bn”.
The ECB has stated that the QE stimulus, launched in March at a pace of €60bn a month, would last at least through September 2016.
ECB chief Mario Draghi last week declared that the bank’s massive stimulus for the eurozone will remain in force “as long as needed” to stabilise prices.
Source : Punch