China, ECB boost for European markets

Comments from Mario Draghi on inflation spur stock prices upwards

Mario Draghi said that the ECB must move quickly to increase inflation in the euro zone. Photograph: AP Photo/Michael Probst

Mario Draghi said that the ECB must move quickly to increase inflation in the euro zone. Photograph: AP Photo/Michael Probst

 

Comments from European Central Bank president Mario Draghi that the bank must move quickly to increase inflation in the euro zone gave stock markets a boost across the continent. The ECB aims to maintain euro zone interest rates at close to, but below, 2 per cent. However the rate has been well below 1 per cent for some time.

DUBLIN

Bank of IrelandCRH

FBD Holdings closed at €10.80, a rise of 1.98 per cent, while Kerry Group rose 2.30 per cent, to close at €56.58.

Amongst those shares that ended down on the day were Dragon Oil, which fell 2.74 per cent, to close at €6.46. Tullow Oil closed at €6.32, a rise of 12.46 per cent.

LONDON Blue-chip shares surged as a surprise cut in Chinese interest rates provided a major boost to mining stocks, while the hint of further stimulus from the ECB also buoyed markets. China’s rate cut, the first reduction in two years, came after growth in the world’s second largest economy slowed to a five-year low of 7.3 per cent in the last quarter.

The pound was sharply higher against the single currency, climbing a cent at just over €1.26 but down slightly versus the dollar at a little under $1.57.

As the price of Brent crude crept back to around $80 a barrel, shares in Tullow Oil rose 6 per cent, or 27.7p to 505p in London . Royal Dutch Shell added 38p to rise to 2391p while BP climbed 6.8p to 448.2p.

State-backed Royal Bank of Scotland headed lower after it admitted that a miscalculation meant it had only just passed a European stress test of its balance sheet. Shares fell 2.9p to 377.7p.

EUROPE

Stoxx Europe 600 Index

National benchmark indices climbed in 17 of the 18 western European markets today. Spain’s Ibex rose 3.1 per cent, its biggest advance since July 2013. Italy’s FTSE MIB added 3.9 per cent, its largest gain in more than two years. Portugal’s PSI 20 Index rose 2.5 per cent and Germany’s Dax increased 2.6 per cent.

Orange rose 5 per cent to €13.71 after chief executive Stéphane Richard said it would consider a strategic alliance with a landline or cable provider to broaden its UK mobile-phone venture’s reach into broadband and TV services.

NEW YORK

At close of business, the Dow Jones industrial average rose 91.06 points, or 0.51 per cent, to 17,810.06, the S&P 500 gained 10.75 points, or 0.52 per cent, to 2,063.50 and the Nasdaq Composite added 11.106 points, or 0.24 per cent, to 4,712.97.

Stocks came off their highs of the day as the energy sector sharply lost ground. The index rose 0.6 per cent after earlier rising almost 2 per cent. The pullback came as Brent crude prices shaved a gain of almost 3 per cent down to a 0.2 per cent advance. US crude futures turned negative.

All but two of the ten primary S&P 500 sectors rose on the day. The only ones to fall were telecom and utilities. (Additional reporting PA, Reuters, Bloomberg)