ECB rate pledge boosts stock mar­kets

Irish Independent - - Business - Bloomberg

EU­RO­PEAN stock mar­kets gained yes­ter­day as the Eu­ro­pean Cen­tral Bank sig­nalled the end to its his­toric bond­buy­ing pro­gramme, but said it ex­pected to keep in­ter­est rates at record low lev­els un­til at least sum­mer 2019.

That sent the euro lower, while gov­ern­ment bonds ral­lied.

“We were ex­pect­ing an ECB ta­per­ing an­nounce­ment, but not a com­mit­ment to keep rates un­changed un­til at least the sum­mer of 2019,” ac­cord­ing to Deutsche Bank’s global co-head of for­eign ex­change re­search, Ge­orge Sar­ave­los.

“While the mar­ket has not been pric­ing a rate hike un­til later next year, we view the in­tro­duc­tion of cal­en­dar-based guid­ance as a ma­te­rial neg­a­tive development for the euro,” he added.

ECB pres­i­dent Mario Draghi said that sub­stan­tial progress had been made in ad­just­ing the path of in­fla­tion, which was one of the goals of the huge quan­ti­ta­tive eas­ing pro­gramme, but that growth in the re­gion is set to slow this year.

In Ire­land, the ISEQ Over­all In­dex joined its Eu­ro­pean peers in yes­ter­day’s ad­vance, clos­ing the ses­sion al­most 1pc higher at 7,196.87.

Among the movers was pack­ag­ing gi­ant Smur­fit Kappa, which added 3.6pc to close at €34.74.

Build­ing ma­te­ri­als gi­ant CRH ad­vanced

2.4pc to €32.69. In­surer FBD was up al­most 1.4pc at €11.05, while Bank of Ire­land dipped 0.7pc to €7.05.

In the UK, the FTSE-100 closed 0.8pc higher. France’s CAC-40 was up 1.4pc and Ger­many’s DAX ended the ses­sion al­most

1.7pc higher.

In the United States, stocks were higher on the strength of tech­nol­ogy shares and deal-driven gains among big me­dia com­pa­nies.

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