World stocks rise as Bank of Japan increases stimulus target

Stocks rose around the world, with the Standard and Poor’s 500 Index surpassing a closing record, while the yen plunged to a six-year low as the Bank of Japan (BoJ) unexpectedly increased its target for monetary stimulus.

The BoJ boosted its annual target for enlarging the monetary base to 80 trillion yen ($724 billion) from 60 to 70 trillion yen, the central bank said. Adding impetus to the stock rally, Japan’s public pension fund, the world’s biggest, boosted its target for equity holdings.

DUBLIN

Bank of Ireland issued an interim management statement in which it said the number of “defaulted” loans on its books is continuing to fall while deposits and new lending are increasing on the back of more positive economic conditions.

It said the volume of defaulted loans stood at €16.4 billion at the end of September, down €1.9 billion on the previous quarter.

Aer Lingus closed at €1.43, a rise of 2.57 per cent, while Ryanair rose 1.86 per cent, to €7.59. CRH closed at €17.67, a rise of just 0.77 per cent, while C&C rose by 3.92 per cent, to €3.55.

London

Banks dominated the risers board as policymakers said lenders will be required to hold more capital to guard against the risks of bad loans from 2019, but the proposals were seen as being at the lower end of expectations.

Barclays shares rose 8 per cent – up 18.25p to 240.8p – as it welcomed the result of the review by the Bank of England’s Financial Policy Committee. The lender’s current leverage ratio of 3.5 per cent is lower than rivals so it looked likely to be more affected if the rules had been tighter.

Royal Bank of Scotland was also higher after it reported profits of £1.27 billion for the third quarter. Lloyds Banking Group lifted 1.96p to 77.1p and HSBC was 10.4p higher at 639.5p.

British Airways owner International Airlines Group rose 18.5p to 409.2p as it upgraded its forecasts in the wake of a sharp rise in profits for the crucial summer quarter to September 30th.

Superdry fashion retailer SuperGroup dived 6 per cent or 55p to 830p after it issued another profits warning – this time due to the impact of warm weather on winter clothing demand.

EUROPE

European stocks rose to a four-week high amid optimism the Bank of Japan’s stimulus will fill some of the gap left by the end of Federal Reserve bond buying.

The Stoxx Europe 600 Index gained 1.8 per cent to 336.8 at the close of trading, boosting its weekly advance to 2.9 per cent, the most this year.

The equity benchmark dropped 1.8 per cent in October, the most since June 2013, amid concern the European Central Bank’s asset purchases won’t be enough to revive the region’s economy.

BNP Paribas rose 3.5 per cent to €50.14 after posting an 11 per cent gain in third-quarter profit that exceeded analysts’ estimates. Net income was €1.5 billion, up from €1.36 billion a year earlier, the lender said. Loan-loss provisions fell 9.2 per cent.

NEW YORK

US stocks rose sharply with the Dow hitting an intraday record high thanks to the move by BoJ, just days after the Federal Reserve wound down its years-long package of incentives.

Gains were broad, with the benchmark S&P 500 index posting 124 new 52-week highs and two new lows; and the Nasdaq Composite recording 214 new highs and 31 new lows. Among the biggest positives on the S&P 500, Abbvie shares rose almost 4 per cent after the drugmaker reported quarterly earnings and said it could deliver strong long-term growth without rushing into another big merger attempt.

The largest decliner on the Nasdaq was Starbucks, down 2.28 per cent, a day after it reported results. – Additional reporting: Reuter, Bloomberg