European stocks eke out fresh record as ECB raises recovery outlook

Stock Markets36 minutes ago (Jun 10, 2021 12:29PM ET)

(C) Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 9, 2021. REUTERS/Staff

By Shreyashi Sanyal and Sruthi Shankar

(Reuters) -European stocks inched to fresh peaks on Thursday as the European Central Bank raised its recovery outlook and promised to keep ample stimulus flowing, while travel stocks fell after a recent run of gains.

The pan-European STOXX 600 index was up just 0.1%, but at a fresh record high of 455.76 points, while the narrower index of euro zone stocks fell 0.1%.

ECB President Christine Lagarde said policymakers agreed to make further emergency purchases over the next quarter “at a significantly higher pace” than during the first months of the year” but gave no further detail about the expected levels.

The central bank now sees 2021 euro zone economic growth at 4.6%, above the 4% projected in March. Inflation projections were also raised, with the ECB expecting price growth at 1.9% this year, in line with its target and above its last projection for 1.2%.

“The ECB’s main mission today was to avoid any taper talk and not harm the still tentative economic recovery or allow bond yields to surge prematurely,” said Carsten Brzeski, global head of macro at ING.

“It accomplished its mission: the ECB seems to have bought some time without starting the taper talk.”

Interest rate-sensitive banking stocks rose 0.4%, while tech stocks rose 0.9%.

The meeting came as data from across the globe point to building inflationary pressures, particularly in commodities, as economies recover from long COVID-19 lockdowns.

That has raised fears that major central banks will start to pare back their massive stimulus programmes sooner than expected, even though policymakers have reaffirmed support until signs of a strong labour market recovery emerge.

Euro zone inflation last month exceeded the central bank’s target of just under 2%, a mark it has undershot for most of the last decade.

Across the Atlantic, the S&P 500 also hit a record high as investors doubted whether a spike in May consumer prices would spur early policy tightening by the Federal Reserve. (N)

European travel and leisure stocks dropped 1.2% following recent gains for the sector on optimism about economic re-openings.

Automakers fell for the third straight day, with German carmaker Volkswagen (DE:VOWG_p) down 0.4% after a report said it expects a shortage in semiconductor supply to ease in the third quarter but sees the bottlenecks continuing in the long-term.

UK’s FTSE 100 was boosted by a 6.6% jump in BT Group (LON:BT) after Altice Group said it had taken a 12.1% stake in Britain’s biggest broadband and mobile operator. (L)

French digital music company Believe, which helps distribute music via deals with platforms such as Spotify (NYSE:SPOT) and Apple (NASDAQ:AAPL) Music, tumbled 17.8% in its stock market debut.

European stocks eke out fresh record as ECB raises recovery outlook

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Stories


Popular Categories