Respite for stock markets as Draghi remarks prompt calm

European shares took a break from slumping on Thursday.

Stocks rose after European Central Bank (ECB) president Mario Draghi dropped a clear signal that more stimulus measures would be forthcoming. His remarks helped calm markets – at least temporarily – after a turbulent start to the year.

Turmoil in financial markets and concerns about China and other emerging markets will prompt a review in March of the ECB’s monetary policy, Mr Draghi said.

The gains extended after oil prices rebounded and prompted a rally on Wall Street.

DUBLIN

The Iseq advanced 1.55 per cent. Building materials group

CRH

, the largest stock on the index, powered ahead by 3.4 per cent to €23.60. It was a day of little stock-specific news, with values influenced instead by Draghi’s comments and the price of oil.

Ryanair was kept in check but still added 0.7 per cent to €14.50, while Bank of Ireland was carried along by better sentiment towards European banks, closing up 4.6 per cent at just under 30 cent.

Paper and packaging group Smurfit Kappa was a relative underperformer, closing up 0.4 per cent at €21.40. Insulation maker Kingspan traded lower earlier in the session but ended up 0.7 per cent at €21.70.

LONDON

Britain’s FTSE 100 rose 1.8 per cent, having officially entered a bear market on Wednesday, meaning it had slid more than 20 per cent from last April’s record high.

Growth-sensitive stocks, such as mining companies, were among the top gainers. Glencore, BHP Billiton and Anglo American rose 10-15.5 per cent as mining shares recovered from their lowest levels in 12 years, buoyed by a rise in copper.

Media and education publisher Pearson surged 17.4 per cent after investors welcomed its plans to cut costs. The company, which last year sold the Financial Times to Japanese media group Nikkei, announced plans to slash 4,000 jobs.

Royal Mail Group rose 4.1 per cent after a better-than-expected increase in parcel volumes, buoyed by strong Christmas trading.

EUROPE

Stocks rose across Europe as investors were encouraged by Draghi’s remarks.

In Italy, the FTSE MIB index climbed 4.2 per cent, while Germany’s Dax was up 1.9 per cent and France’s Cac 40 added almost 2 per cent.

Italian banks rebounded from a sell-off on Wednesday triggered by bad loan and liquidity worries. Embattled lender Monte dei Paschi soared 43 per cent as prime minister Matteo Renzi sought to reassure investors that the sector was solid. Monte dei Paschi has borne the brunt of a sell-off in Italian banking shares this year, losing more than half its market value since 2015.

Swiss-American technology accessories maker Logitech jumped 9.6 per cent after its quarterly results beat analyst forecasts.

However, Deutsche Bank fell 3.4 per cent after saying it expected a net loss of €6.7 billion for 2015 due to writedowns, litigation charges and restructuring costs. The announcement by Germany's biggest bank has renewed concerns that it will now need to raise new capital.

US

Shares rallied on Wall Street, lifting global equities from the brink of a bear market, while crude oil prices climbed off their lowest closing mark in more than 12 years and headed back up towards $30 a barrel.

The S&P 500 was up 1.4 per cent in early trading.

Energy shares paced gains, with a 3.8 per cent advance as nine of 10 main groups rose. Chevron climbed 2.6 per cent and Home Depot surged 4.2 per cent as energy and consumer companies led the rebound.

Banks also bounced, with Wells Fargo up 2 per cent.

Verizon Communications gained 3.5 per cent after its profits beat estimates.

– Additional reporting: Reuters/Bloomberg