European traders in party mode after ECB extends bond buying

Banks boosted European stocks to their highest level since January after the European Central Bank altered the parameters of its asset purchasing programme in a move that may boost lender profitability.

The FTSE 100 Index paused for breath following a heady rise in the previous session, climbing 29.32 points to 6,931.55.

A month-long rally on Wall Street, sparked by Donald Trump’s election to the office of US president, was also extended on Thursday, driving major Wall Street indexes to record highs.

DUBLIN

The Iseq joined in the European optimism, up 1.6 per cent. Bank of Ireland performed well, up 3.9 per cent on the back of the extension to the ECB's quantitative easing scheme.

Central Bank set to smooth impact of ECB bond buying restrictions

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Pound surges ahead but analysts predict it will fall in 2017

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Central Bank set to increase staff numbers by 115 by end of year

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Citi trader exacerbated October sterling ‘flash crash’

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Independent News and Media was up 5.8 per cent, as it recovered all of the ground lost in the last 10 days following news of a proposed bid for Newstalk.

Ryanair was ahead by more than 3 per cent, as sterling rose, potentially eroding some of the airline's post-Brexit currency woes.

Smurfit Kappa was up more than 4.8 per cent. following strong results from packaging industry peer DS Smith.

LONDON

Bookmakers were nursing hefty losses after a cross-party group of MPs called for a clampdown on betting machines that allow punters to lose £300 (€350) a minute.

The parliamentary group said the UK government should cut maximum stakes on fixed-odd betting terminals from £100 a spin to £2 . William Hill sunk more than 6 per cent, while Ladbrokes Coral dropped 2 per cent.

Sports Direct was the biggest faller on the FTSE 250 after profits took a hammering following the collapse in sterling. Shares dropped more than 8 per cent, after the scandal-hit retailer said underlying earnings plunged 33.5 per cent to £145.3 million in the first half of the year.

Shares in Capita plunged to a 10-year low after the outsourcing firm warned over profits and moved to shore up its balance sheet by selling assets. The FTSE 100 firm said "near-term headwinds", which had pegged back its performance this year, would now persist into the first half of 2017.

It said underlying pre-tax profits, excluding restructuring costs, would reach around £515 million for the full year, well short of forecasts. Shares were down more than 13 per cent.

EUROPE

The Stoxx Europe 600 Index climbed 1.2 per cent at the close, for a fourth daily increase. Italy’s FTSE MIB and France’s CAC 40 extended gains in bull market territory, while Germany’s DAX closed above 11,000 for the first time in a year. Spain’s IBEX 35 jumped 2.1 per cent for the biggest gains among developed markets.

Gains exceeding 9 per cent in four sessions pushed the Stoxx 600 banks index toward an 11-month high and its most overbought level in almost two years. ECB president Mario Draghi said the bank will buy assets yielding less than its deposit rate of minus 0.4 per cent, a move that's steepening the so-called yield curve.

NEW YORK

Heading into the afternoon, seven of the 11 major S&P 500 sectors were higher, led by a 0.7 per cent gain in technology due mostly to Apple, while the financial sector rose on gains in Bank of America and JPMorgan. Goldman Sachs was the top stock on the Dow, rising 1.7 per cent. The investment bank's shares have been the biggest contributor to the index's move since the election.

The industrial sector, which has risen 8.8 per cent in the past month, slipped 0.4 per cent. Lululemon soared 15.7 per cent to $69.25 after the yoga and leisure apparel retailer reported a better-than-expected quarterly profit. Costco rose 3.1 per cent to $158.68 after the warehouse club retailer reported a quarterly profit that beat analysts' expectations.

– (Additional reporting: Bloomberg/Reuters/PA)