European stocks rose as the ECB held a stable policy, but hinted at an October update
Growth in the euro zone is stronger than previously thought
European Central Bank President Mario Draghi
European stocks rose on Thursday as euro zone economic growth numbers increased and the European Central Bank offered some surprises in abandoning monetary policy as a whole.
The Stoxx Europe 600 SXXP + 0.27% index rose 0.3% to close at 374.95, little changed after the conclusion of ECB President Mario Draghi's press conference in Frankfurt. Only the finance sector finished in red. On Wednesday, the index closed up 0.1%, stopping a two-day losing streak.
In Frankfurt, DAX 30 DAX, + 0.67% rose 0.7% to 12.296.63, and in Paris, the CAC 40 PX1, + 0.26% rose 0.3% to 5,114.62. In London, FTSE 100 UKX, + 0.58% rose 0.6% to 7,396.98.
The ECB says it will continue its asset purchase program of € 60 billion per month until the end of 2017, or more, and that stimulus measures could be stepped up if the outlook worsens.
"Information on the schedules and spike conditions will come in October," said Antoine Lesné, head of research for SPDR ETF on State Street, in a note.
"Meanwhile, low inflation and a strong euro against a backdrop of stronger economic growth and increased consumer confidence still provide a positive environment for riskier assets," Lesné said.
Euro EURUSD, + 0.7217% has jumped 14% against the dollar so far this year.
Bank shares fell to intraday lows as the ECB left interest rates unchanged. Higher interest rates can increase net interest margin for creditors. The Stoxx Europe 600 Index of FX7, -0.75%, fell 0.8%. In it, Deutsche Bank AG DBK shares, -1.62% DB, -0.66% closed down 1.2%, Société Générale SA GLE, -0.61% down 0.6% and Banco Santander SA SAN, -0, 43% SAN, + 0.55% down 0.4%.
Bank shares earlier in the session also suffered a correction or rebounded after Eurostat said the eurozone economy was 2.3% larger in the three months to June than in the same period last year. That would be the fastest growth rate recorded since the first three months of 2011.
Eur (o) phoric:
The euro rose after a brighter economic growth rate and stayed above $ 1.20 after Draghi's remarks. Euro EURUSD + 0.7385% buys $ 1.2024 around European market closing time and reaches intraday highs at $ 1.2059. The shared currency end of Wednesday buys $ 1.1917.
The ECB has previously signaled that they are concerned about the strength of the euro. Draghi was asked on Thursday about when the euro exchange rate rise would be a problem, but the central bank boss declined to comment.
"With the dollar under pressure as the US and US jobs growth kiosks are facing a second storm within weeks, the euro is always likely to strengthen against the greenback today," writes David Lamb, head of transactions at Fexco Corporate Payments.
"But the strong growth of the eurozone - and the recognition issued by Mr. Draghi that QE can be controlled after the October ECB meeting - turned into a defeat. $ 1.20 was seen as a symbolic barrier for the euro, but based on this evidence it can easily become normal new ", he wrote.
The yield on German 10-year government bond TMBMKDE-10Y, -12.83%, fell 4 basis points to 0.304%, according to Tradeweb. The yield falls when the price falls.
Car maker revved:
Shares of auto makers continued to rally after Barclays and Goldman Sachs upgraded the sector on Wednesday.
Daimler AG DAI, + 0.05% up 0.8%, BMW AG BMW, + 0.91% up 1.1%, and Volkswagen AG VOW3, -0.16% VLKAY, + 0.82% taking 0.3% %. Fiat Chrysler Automobiles NV FCA, -1.10% FCAU, -0.27% however, goes back to red and down 1.1%.
Stock movers:
RWE AG RWE, + 3.59% and E.ON SE EOAN, + 1.54% respectively rose 3.8% and 1.9%, after Deutsche Bank raised its price target on the energy company, according to Dow Jones Newswires.
Royal Bank of Scotland RBS, RBS -1.39%, -1.09% down 1.4 as British lawmakers called on the Financial Conduct Authority to publish its report of a potential misstep by the bank's business restructuring unit.