European shares power ahead on ECB action expectations
EUROPE’S top shares climbed to one-week highs today, powered by expectations of ECB action as policymakers stepped up rhetoric in support of the euro, which leaves the market exposed to a sharp retreat if action fails to follow next week.
German Chancellor Angela Merkel and French President Francois Hollande pledged on Friday to do all in their power to protect the euro, echoing the commitment made by European Central Bank (ECB) President Mario Draghi a day earlier.
But with expectations now running high ahead of next week's ECB meeting, and with Germany still reluctant to approve some of the more radical measures proposed to solve the euro zone crisis, strategists warned that markets may end up disappointed.
"The market expects action as we go into next week," said Gerhard Schwarz, head of equity strategy at Baader Bank.
"Everybody was a little bit frustrated about negative macro news flow, so when there seems to be a glimmer of hope, certainly there is some willingness to think there is a solution down the road because policymakers are moving more quickly. If this is the case remains to be seen."
The FTSEurofirst 300 provisionally ended the session up 1.3pc at 1,055.64 points, its highest close in a week.