ECB rate pledge boosts stock markets
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
In the United States, stocks were higher on the strength of technology shares and deal-driven gains among big media companies.