Thursday 22 March 2018

Euro stocks boosted by fresh hopes for ECB rescue pack to support banks

EUROPEAN stocks ended higher on Tuesday, hitting a one-week closing high, boosted by talk of further steps by the European Central Bank to support the region's banks as well as by hopes of fresh measures from China to cushion a slowdown in growth.

The FTSEurofirst 300 index of top European shares unofficially closed 0.8 percent higher at 991.39 points, adding to a tentative recovery rally started last week.

Spain's IBEX index lost 2.3 percent but managed to end the session off a nine-year low hit during the day, helped by speculation that the ECB could soon unveil measures to help the euro zone's ailing banks.

"The rumour mill has been busy, with talk of an ECB press conference about bank recapitalisation, supporting the euro and giving euro zone stocks upside momentum. We do not believe in it, for the record," said Saxo Bank Chief Economist Steen Jakobsen, in Copenhagen.

"Spain is now the main focus, it's on the brink of collapse. Just look at 10-year bond yields...for now, I still think the stock market's low will come in July or August, with some 'hope rallies' in between."

Mining stocks were among the top gainers on Tuesday, with Rio Tinto up 2.4 percent and Xstrata up 2.3 percent.

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