Friday 28 October 2016

European stocks rise most in a month

Published 22/01/2016 | 02:30

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

European stocks rebounded from a 15-month low after Mario Draghi said the European Central Bank may reconsider its monetary policy stance in March.

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A weakening in the euro buoyed exporters and commodity producers, after Mr Draghi noted an increase in downside risks this year and said there were no limits to the central bank's actions within mandate.

By the close in Dublin, the ISEQ Overall Index was up 1.55pc, or 95.52 points, to end the trading day at 6,255.35.

The leaders on the Dublin market included building materials group CRH, which closed up 3.4pc to €23.60, while speciality baker Aryzta rose 3.1pc to €40.36.

On the other side of the board, the laggards included Glanbia, which slipped 1.9pc to €16.69, while fruit company Fyffes dropped 1.6pc to €1.49.

Elsewhere, the Stoxx Europe 600 Index closed 1.9pc higher, the biggest advance since December 23, after an intraday gain of as much as 2.5pc. "Draghi was pretty clear that further easing in March is very likely," said Thomas Thygesen, SEB's head of cross-asset strategy in Copenhagen.

"While a dovish ECB is one of the ingredients markets were looking for, on its own it's still not enough to really improve sentiment. It needs to be accompanied by a statement from the Fed that they will not be hiking four times this year. But at least we can be a little more optimistic."

Concern over global-growth prospects have sent equities tumbling this year. Worries about the impact of China's slowdown and tumbling oil prices, just as the Federal Reserve raised rates in December for the first time in almost a decade, sent the Stoxx 600 into a bear market last week. Odds have stayed low for a US rate increase at next week's meeting, and the probability of higher borrowing costs in March is also falling.

Additional reporting by Bloomberg

Irish Independent

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