There was distinct relief in European markets after the ECB's presentation of a rescue plan for the euro and the debt-ridden southern European countries. After days of anxious waiting markets could relate to something real, and the investors were not disappointed. Quite the contrary. The wait was finally over, and it created intense activity and sharply rising prices.
In the UK, FTSE 100 rose 2.1 percent, DAX rose 2.9 percent, and the CAC-40 rose by 3.1 percent. Volume was also extreme. Compared to the last 10 day average turnover rose by 93 percent in London and 107 and 103 percent Paris and Frankfurt.
The financial markets rises, after the ECB finally responded to the crisis with an asset purchase plan at a size that we have not seen before. Within its mandate, the ECB will reduce the crisis country complemented borrowing costs by buying their bonds.
Mario Draghi and the ECB's plan involves unlimited purchases of government bonds in crisis-hit countries with maturities of up to three years. At the same time, the ECB will be equivalent to private creditors, and help will go hand in hand with reform programs. That was something that the market liked to hear. Under the previous program, the ECB was prioritizes to than private, which did not increase the risk desire.
Banks fared best in Europe Stoxx 600 Thursday with an overall increase of 4.2 percent. Italian Banca Popolare rose 11.1 percent while Deutsche Bank and Lloyds Banking Group rose about 7 percent. 575 of Europe Stoxx 600 members rose Thursday.
In the low end Nokia fell by 2.9 percent to a price of 1.932. Thus, the share has fallen by 15.5 percent since Wednesday's presentation of the new members of the Lumia family. They were not the revolution, the market had hoped for, and Deutsche Bank receipted with a downgrade to "sell" and price target of 1.60 euro.
No comments:
Post a Comment