LONDON: Europe’s main stock markets rose solidly yesterday as traders remained unfazed by the lack of action at the ECB and banked on further recovery in the eurozone.
The European Central Bank held its key interest rates steady with bank head Mario Draghi brushing off widespread talk that damaging deflation was becoming a threat. Traders also pored over earnings results, including from Daimler and Vodafone, and mixed data from the United States.
London’s benchmark FTSE 100 index ended the day up 1.55 percent at 6,558.28 points. Frankfurt’s DAX 30 rose 1.54 percent to 9,256.58 points and the CAC 40 in Paris also gained 1.71 percent to 4,188.1 points.
As widely but not universally expected, the ECB left its central “refi” or refinancing rate unchanged at 0.25 percent at its monthly policy meeting. There had been some speculation that the central bank could ease monetary conditions in the 18 countries that share the euro after area-wide inflation came in at a lower than expected 0.7 percent last month. But Draghi said that the euro area is not experiencing deflation — a widespread sustained fall in prices that leads to falling output — even though inflation is low.
The Bank of England, meanwhile, voted to keep its main interest rate at a record-low level of 0.50 percent, where it has now stood for nearly five years. Opting against following the US Federal Reserve in tapering, the BoE also decided to maintain stimulus at £375bn. It is intended to boost bank lending and economic activity.
In foreign exchange, the European single currency rose to $1.3602 from $1.3533 late in New York on Wednesday. The euro also gained to 83.24 British pence from 82.87 pence, while the British pound rode to $1.6338 from $1.6308 on Wednesday. The price of gold gained to $1.258.50 an ounce from $1.254.50 an ounce on Wednesday.
On the corporate front, the share price of Daimler rallied 2.63 percent to ¤62.48 after the German luxury carmaker said it achieved record sales and profits in 2013, adding that it expects “significant” growth again this year. Vodafone shares rose by 3.71 percent to 223.9 pence as the British mobile phone giant said strong sales across emerging markets helped to offset strains in Europe.
US stocks also moved higher yesterday though social media giant Twitter nosedived. In midday trading, the Dow Jones Industrial Average added 0.98 percent to 15,591.77. The broad-based S&P 500 rose 0.98 percent to 1,768.95, while the tech-rich Nasdaq Composite Index gained 1.09 percent to 4,055.11. Leading microblogging host Twitter dropped about 20 percent after it reported disappointing user statistics in its quarterly earnings report late on Wednesday.
AFP
