The optimism that monetary policies by the European Central Bank and Federal Reserve will support the economy sent European stocks up which climbed the most in a three-week period.
“Market participants expect quantitative easing from the ECB,” said Christoph Riniker, head of strategy research at Julius Baer Group Ltd. in Zurich. “After the ECB meeting and Greek elections, there is certainly some uncertainty that will leave the market. QE equals sentiment boost, which equals help for peripherals.”
The
Stoxx Europe 600 Index boosted 1.3 percent to 337.4 at 9:23 a.m. in
London. The equity benchmark rose 0.5 percent yesterday on optimism
weaker inflation data bolsters the case for the ECB to begin
quantitative easing. The central bank next meeting is on Jan. 22. Futures on
the Euro Stoxx 50 Index rallied after market close as German lawmakers
said the nation is open to discussing debt relief with Greece’s next government.
The Stoxx 600 is still down 3.9 percent from a Dec. 5 high as energy shares slumped and concern grew over Greece as Prime Minister Antonis Samaras said this month’s election could lead to its exit from the euro area, as Bloomberg reports.
Greece’s ASE Index jumped 1.6 percent today from its lowest level since November 2012. German Chancellor Angela Merkel yesterday backed keeping Greece in the euro area. The German government has consistently sought to avoid the most-indebted nation’s exit from the bloc, she said late yesterday in London.
In the U.S., minutes from the Fed’s last meeting showed
most officials agreed their new policy guidance means they are unlikely
to raise interest rates before late April. U.S. stock-index futures climbed 0.7 percent.
Standard Chartered Plc gained 1.7 percent after saying it is closing its institutional equities business and eliminating about 200 jobs, ahead of plans to cut 2,000 more staff. The lender plans to save $400 million in costs this year.
Tesco
Plc surged 7.4 percent, the most in six years, after Chief Executive
Officer Dave Lewis set out a plan for reviving the struggling U.K.
grocer that includes closing dozens of stores, halting dividend payments
and disposing of assets worth billions of pounds. The company also
posted Christmas sales that beat estimates and said it’s cutting prices
on hundreds of branded products.
Marks & Spencer Group Plc dropped 3.2 percent after saying same-store sales at a division that includes its apparel business dropped 5.8 percent in the third quarter, missing analysts’ estimates.
Pernod Ricard SA added 3 percent after Bank of America Corp. raised its recommendation on the world’s second-biggest distiller to a buy from sell, citing trends in China, the recovery in the U.S. and momentum in India.
SAP SE declined 2 percent after UBS Group AG downgraded the world’s largest maker of business applications to the equivalent of a hold from buy. The brokerage said margin expansion in the last decade has not come from productivity and that a customer survey suggests weak demand growth for 2015.
