EUROPE

The Star Early Edition - - MARKETS -

STOCKS rose the most in a week yes­ter­day, rev­ers­ing ear­lier losses, after Mario Draghi said the Euro­pean Cen­tral Bank’s (ECB) ex­panded pur­chase pro­gramme could in­clude gov­ern­ment bonds.

The Stoxx Europe 600 in­dex added 0.5 per­cent to 337.25 at the close of trad­ing in London, after ear­lier fall­ing as much as 0.8 per­cent as Ja­pan un­ex­pect­edly slipped into a re­ces­sion. The Stoxx 600 has re­bounded 8.8 per­cent from this year’s low on Oc­to­ber 16 as the Bank of Ja­pan un­ex­pect­edly boosted its stim­u­lus and most lenders in Europe passed cap­i­tal strength tests.

“It’s a fur­ther step to­wards full-scale QE [quan­ti­ta­tive eas­ing],” Alessan­dro Bee, a strate­gist at Bank J Safra Sarasin, said. “Mar­kets want this kind of stim­u­lus and hear­ing Draghi men­tion the pos­si­bil­ity of buy­ing gov­ern­ment bonds re­duces un­cer­tainty. The ques­tion is when will it come through? We think the ECB will start do­ing this in the first quar­ter of 2015. Cen­tral banks are clearly still the ma­jor support for Euro­pean mar­kets.” – Bloomberg

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