Yesterday, European equities surged, reversing all of Thursday’s pull-back and resuming a week-long rally as investors judged the European Central Bank remains committed to bold action to fight the eurozone debt crisis. Markets were also awaiting US jobs data that could fuel expectations of further stimulus from the Federal Reserve. US index futures climbed, while Asian shares fell.
Allianz SE and Axa SA gained 4.1% and 3.4%, respectively, after Europe’s largest insurers reported profit that beat analysts’ estimates. Banks rose as Intesa Sanpaolo SpA and Natixis SA posted better-than-projected quarterly earnings. Siemens AG gained 4.6% after Europe’s biggest engineering company said it will repurchase as much as three billion euros in stock by the end of the year.
The FTSEurofirst 300 index of top European shares was up 1.5% at 1,071.02 points, on track for its ninth weekly gain in a row, extending its longest run of weekly rises since mid-2005.
The benchmark index dropped 1.2% on Thursday after European Central Bank President Mario Draghi initially disappointed some investors by announcing no immediate action to help lower the borrowing costs of debt-laden Spain and Italy.
Draghi said the ECB was ready to start buying government bonds again but warned that any intervention would not come before September, and only if governments activated the eurozone’s bailout funds to join the ECB in buying bonds.
Around Europe, UK’s FTSE 100 index was up 1.4%, Germany‘s DAX index was up 2.1% and France’s CAC 40 was up 2.4%.
Asian stocks fell for a third day as after the European Central Bank failed to deliver immediate action to stem the debt crisis and after China’s central bank affirmed current policies. Sharp Corp. led technology shares lower after it forecast a wider loss.
This article was compiled by Valletta Fund Management Limited, a member of the BOV Group.
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