(MENAFN- Gulf Times) European stocks shot higher yesterday as investors enjoyed a respite from volatile Chinese markets, closed for a long holiday weekend, and took cheer from hints of more central bank stimulus.
London's benchmark FTSE 100 index climbed 1.82% to close at 6,194.10 points, the CAC 40 in Paris gained 2.17% to finish at 4,653.79, while Frankfurt's DAX 30 jumped 2.68% to end at 10,317.84.
The European Central Bank boosted market sentiment when president Mario Draghi said policy makers were ready to ramp up its contentious bond purchase programme-known as quantitative easing-if more stimulus is needed in the single currency area.
"The asset purchase programme provides sufficient flexibility in terms of adjusting the size, composition and duration of the programme," Draghi told a news conference after the ECB announced it was keeping its key interest rates unchanged at record lows.
"The ECB has shown markets the safety net. If required, the ECB could scale up its monetary stimulus," said Berenberg Bank economist Holger Schmieding.
The ECB also cut its growth and inflation forecasts for 2015-2017, noting the downside risks from low oil prices and the economic slowdown in China.
But the main take-away for analysts was that "the strong message is that the ECB is ready and prepared to increase its policy support for the eurozone economy in the near future." said Jonathan Loynes, chief European economist at Capital Economics.
Investors also found some relief in the calm of Asian markets yesterday with China's bourses, which have been hammered recently by slowing growth in the world's second largest economy, shut for a public celebration.
"At least for a few days, concerns over China can be put to one side while the country closes its exchanges to celebrate seventy years since the end of World War II," said CMC Markets UK analyst Jasper Lawler.
The euro, which had been holding around $1.1220, fell to $1.1109 in late afternoon London trading.
In corporate action, shares in low-cost airline EasyJet soared 5.38% to close at 1,762 pence after it raised its full year pre-tax profit forecast to a record £675mn-£700mn (‚¬917mn-‚¬950mn, $1.03bn-$1.07bn).
Shares in supermarket chain Morrison jumped 4.72% to 170.80 pence on reports that South African billionaire Christo Wiese, already present in the British market, may go on a shopping spree.
In Switzerland, shares in Syngenta grew 3.46% to 338.20 francs after the agricultural products giant announced a share buyback of more than $2bn and that it would sell its vegetable seeds business.
Syngenta, which last week saw its share price plunge 18% after US seed giant Monsanto finally dropped its campaign to buy it, said the measures aimed to "accelerate shareholder value creation".
However shares in French electricity company EDF slumped 2.24% to ‚¬18.290 after it announced a further delay in the startup of its next-generation nuclear reactor in Flamanville, which will increase the cost overruns for the project.
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