European shares rose on Wednesday, taking a benchmark index close to eight-month highs, helped by some well-received company results and the prospect of more monetary stimulus from the European Central Bank. The STOXX Europe 600 index finished up 0.3 percent at 350.46 points, near its highest level since January, although the index remains down by 4 percent so far in 2016.
European stock markets were propped up as eurozone bond yields fell on bets that the ECB, which meets on Thursday, will announce further policy easing measures. Lower bond yields and negative interest rates have hit returns on bonds and cash, driving investors over to the better returns available from stocks, although negative rates may also affect the profitability of European banks.
"The ECB will soon find itself at a crossroads, and will have to assure the market in principle that its QE (quantitative easing) programme will continue despite the negative side effects on the financial system," said Dierk Brandenburg, senior sovereign analyst at Fidelity International. British engineering group Weir was the best-performing STOXX 600 stock in percentage terms, climbing 4.5 percent after Morgan Stanley raised its rating on it to "overweight" from "equal weight". However, shares in Swiss security company Dorma+Kaba slumped 7.9 percent after the company reported a drop in profits.
Comments
Comments are closed.