Europe Stocks Rise as Draghi Says Bond-Buying to Begin Next WeekAlan Soughley and Sofia Horta e Costa
European stocks advanced for a second day, pushing the Stoxx Europe 600 Index to its highest level since July 2007, as the European Central Bank committed to begin asset purchases on March 9.
The Stoxx 600 rose 0.8 percent to 393.78 at the close of trading. The gauge has rallied 15 percent this year after the ECB said it would start a quantitative-easing program. At the same time, economic data are topping forecasts by the most in two years, according to Citigroup Inc.’s Surprise Index.
“Europe is really the hotspot for global equity investors right now,” said Michael Kapler, a portfolio manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “With the ECB buying bonds, economic data surprising on the upside, and earnings finally improving, sentiment has become very bullish. Expectations for the ECB have gone up a lot.”
The ECB kept interest rates unchanged at record lows today. The central bank will begin asset purchases next week, including some debt with negative yields, amounting to 60 billion euros ($66 billion) a month, President Mario Draghi told reporters in Nicosia, Cyprus. He also unveiled forecasts showing higher economic growth with an inflation outlook that puts the ECB on track to reach its goal of just below 2 percent in 2017.
Germany’s DAX Index rose 1 percent to a record close. Portugal’s PSI 20 Index jumped 1.7 percent, for the best performance of 18 western-European markets. The volume of Stoxx 600 shares changing hands was 8.7 percent lower than the 30-day average.
Among stocks moving on corporate news, Aviva Plc rose 7.1 percent. The insurer, which is in the process of buying Friends Life Group Ltd., increased its shareholder payout for 2014 by 30 percent as it reported higher profit. Friends Life added 7.1 percent as it posted an increase in earnings for 2014.
Carrefour SA gained 2.4 percent after France’s largest retailer reported higher full-year earnings. Adidas AG advanced 3.4 percent after the world’s second-biggest sporting-goods maker forecast 2015 net income from continuing operations to rise as much as 10 percent. Schroders Plc climbed 4.8 percent after the asset manager said investors poured more money into its funds last year.