Global stocks rise after Draghi stimulus comments
Global stocks climbed for a second day as European Central Bank President Mario Draghi signaled the continuation of monetary stimulus. U.S. futures were little changed while Asian shares advanced.
Bayer AG (BAYN) increased 1.3 percent after saying sales will rise 4 percent to 5 percent this year. Deutsche Telekom AG (DTE) declined 0.7 percent as Germany's largest telephone company reported fourth-quarter earnings that missed analysts' projections. The Stoxx Europe 600 Index gained 0.5 percent to 288.65 at 8:24 a.m. in London, extending the gauge's advance this year to 3.2 percent. Standard & Poor's 500 Index futures added 0.1 percent, after the benchmark index rose 1.3 percent yesterday as Federal Reserve Chairman Ben S. Bernanke said recent increases in some interest rates may signal the U.S. economy is gaining vigor. The MSCI Asia Pacific Index rose 1.4 percent as Japanese Prime Minister Shinzo Abe nominated a new central bank governor amid speculation he will push for more monetary stimulus.
"Ben Bernanke triggered a rally as he reaffirmed his commitment to maintaining stimulus efforts until unemployment came back to a target level as he testified before congress," Jonathan Sudaria, a trader at Capital Spreads in London, wrote in an e-mail. "Mario Draghi poured further fuel on the fire as he released a similarly dovish set of comments."
The volume of shares changing hands in Stoxx 600listed companies was 7.4 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
Draghi signaled the bank has no intention of tightening monetary policy anytime soon with inflation projected to "significantly" undershoot its 2 percent target next year.
While the ECB's balance sheet may shrink naturally as confidence returns to financial markets and banks repay emergency loans, policy makers are far from considering an exit from monetary stimulus, Draghi said at an event in Munich late yesterday.
Italy is headed for a broad coalition government as bondholders pressure Pier Luigi Bersani and Silvio Berlusconi to set aside their rivalries and form a partnership, said Finance Undersecretary Gianfranco Polillo. A joint government between Bersani's Democratic Party and the forces led by Berlusconi, a three-time former premier, is "the only possible way," Polillo said late yesterday in a telephone interview. In the US, data at 8:30 a.m. New York time may show the U.S. economy expanded at a revised 0.5 percent annualized pace in the fourth quarter from an initial 0.1 percent contraction, according to the median forecast of 85 economists in a Bloomberg News survey. Another report may show initial jobless claims dropped last week. Bernanke yesterday said the central bank's easing policies are helping to improve demand for homes and cars, and that the housing market is recovering.