European Stocks Rise for Fifth Day After ECB Said to Propose QE

Updated on

European stocks extended a seven-year high as the European Central Bank was said to plan further stimulus measures.

The Stoxx Europe 600 Index rose 0.6 percent to 358.12 at the close of trading in London, reversing earlier losses after two euro-area central-bank officials said the ECB Executive Board has recommended asset purchases of 50 billion euros ($58 billion) a month until December 2016. The equity measure has rallied 5.4 percent in the past five days on optimism that the ECB will step up stimulus measures at its Jan. 22 meeting.

“Investors are readjusting their expectations ahead of tomorrow’s ECB meeting,” Ralf Zimmermann, an equity strategist at Bankhaus Lampe KG in Dusseldorf, Germany, said in a phone interview. “We’ve seen a significant rebound in markets. There are some downside risks.”

The 25-member Governing Council is gathering in Frankfurt on Wednesday to discuss the plan and could make changes before a final decision on Thursday, the people said. Energy companies in the Stoxx 600 climbed the most among 19 industry groups.

The Stoxx 600 dropped as much as 0.8 percent earlier as ECB Governing Council member Ewald Nowotny said investors should not get carried away by one policy meeting. The volume of Stoxx 600 shares changing hands was 30 percent greater than the 30-day average, data compiled by Bloomberg show.

Novartis, Roche

The Swiss Market Index fell 2.1 percent, the second-biggest drop among 18 national benchmark equity gauges, as the franc strengthened against the euro. The Swiss National Bank’s unexpected move to abandon its currency peg against the euro last week pushed the benchmark equity index to a one-year low. Drugmakers Novartis AG and Roche Holding AG fell more than 2.5 percent today, sending Stoxx 600 health-care companies down 0.9 percent from a record.

Greece’s ASE Index slid 2.4 percent for a second day of losses as the country prepares for an election on Jan. 25.

Among companies moving on corporate news, Alstom SA advanced 4 percent after posting an increase in third-quarter revenue. The French company selling its energy-equipment businesses to General Electric Co. also reiterated its forecasts for sales growth and operating margin.

SABMiller Plc added 3 percent after falling for three days. The company posted an increase in revenue from Africa and Europe, helping mitigate an unexpected drop in third-quarter beer volume.

Dutch chipmaker ASML Holding NV climbed 2.6 percent after forecasting first-quarter sales that topped analysts’ estimates and announcing a new 1 billion-euro share buyback program.

The U.K.’s FTSE 100 Index gained 1.6 percent after minutes from the Bank of England’s last meeting showed two policy makers dropped their call for an interest-rate increase this month.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE