European stocks rise on probability of more stimulus

Mario Draghi’s policy update lifted almost all European equity markets on Friday, with euro-area banking shares stealing the spotlight.

The Euro Stoxx Banks Index climbed 2.1 percent, a fifth day of gains and the most on a European Central Bank decision day since January. Draghi said the ECB probably won’t stop its asset buying abruptly, indicating a potential extension of its stimulus program. Speculation that the central bank president is getting ready to loosen the limits of assets eligible for buying has sent lenders rallying about four times more than the rest of the market in October.

While Draghi said the Governing Council didn’t discuss prolonging or tapering the stimulus program, he noted that economic forecasts in December and the results of internal studies on options to avoid running into bond shortages will help the decision then.

The benchmark Euro Stoxx 50 Index rose 0.7 percent to its highest level since the 8 September, while its banks closed just 1.2 percent away from its level before the U.K. vote to leave the European Union.

Asian stocks pared their biggest weekly advance in a month as health-care companies led losses and an earthquake in western Japan weighed on Tokyo equities. Hong Kong markets were shut due to a typhoon.

The MSCI Asia Pacific Index fell 0.3 percent to 139.70 as of 3:03 p.m. in Hong Kong, halting a threeday gain. Japan’s Topix index slid 0.4 percent from a May high, paced by a slump in Nintendo Co. The quake, which struck Tottori prefecture, led to power outages and halted bullet trains. Hong Kong canceled stock trading for the day as Typhoon Haima lashed the global financial center, prompting schools to close and airlines to suspend flights.

This article was compiled by Valletta Fund Management Limited, a member of the BOV Group.Valletta Fund Management,TG Complex, Suite 2, Level 3, Brewery Str, Mriehel BKR 3000 Freephone: 80072344. E-mail: infovfm@bov.com. Website: www.vfm.com.mt. Valletta Fund Management Limited is licensed by the MFSA.