Friday 13 December 2019

Irish and European stocks rise after Draghi talks up inflation action

Traders are pictured at their desks in front of the German share price index DAX board at the Frankfurt stock exchange. Reuters
Traders are pictured at their desks in front of the German share price index DAX board at the Frankfurt stock exchange. Reuters
Gavin McLoughlin

Gavin McLoughlin

The ISEQ index of Irish shares jumped 1.72pc yesterday, while in Europe stocks climbed to a two-month high as ECB President Mario Draghi reiterated his commitment to raising inflation as fast as possible, and China cut interest rates.

The ISEQ finished at 4,970.47, and was led by explorers of both the minerals and oil and gas variety.

Ormonde Mining was up 5.29pc after announcing that it has been granted a mining permit for its flagship tungsten project in Spain.

Providence Resources climbed almost 5pc on a day where crude oil headed for its first weekly price increase since September,

The Stoxx Europe 600 Index added 2.1pc to 345.24 at the close of trading, snapping a two-day losing streak.

The equity benchmark has advanced 2.9pc this week amid investor speculation of further ECB stimulus. Stocks extended gains today after China cut interest rates, with mining companies leading.

"There are two key drivers, with the first being Draghi saying inflation needs to be boosted as soon as possible, which makes quantitative easing more likely," said Steen Jakobsen, chief investment officer at Saxo Bank in Copenhagen.

"The decision of the Chinese central bank to cut interest rates shows that China is also reacting to the slowdown. This makes the market perceive a perfect risk-on day for Friday..

National benchmark indexes climbed in 17 of the 18 western European markets yesterday. Spain's IBEX rose 3.1pc, its biggest advance since July 2013. Italy's FTSE MIB added 3.9pc, its largest gain in more than two years. Portugal's PSI 20 Index rose 2.5pc and Germany's DAX increased 2.6pc.

Oil and gas companies posted the second-biggest gain on the index amid the rise in crude prices. Tullow Oil jumped 5.8pc to £5.05 and Total rose 4pc to €48.54. (Additional reporting Bloomberg)

Irish Independent

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