ROME: European shares have started the week strongly, buoyed by gains on Wall Street and a weaker euro.
At the close, Germany’s DAX 30 jumped 1.3 per cent, while France’s CAC 40 tacked on 0.9 per cent as traders reassessed last week’s reaction to less aggressive stimulus measures from the ECB than expected.
The broader Stoxx Europe 600 gained 0.5 per cent, paring earlier gains of 1 per cent as oil prices slumped to seven-year lows.
ECB President Mario Draghi sought to reassure investors on Friday that the central bank would “no doubt” step up its stimulus program if needed. The comments came after European markets closed for the weekend.
The losses in European stock markets on Thursday and Friday “reflected a massive overreaction” to ECB policy, according to Ben Kumar, investment manager at Seven Investment Management, noting the bank still cut rates and extended its stimulus program.
“I think everyone believes payrolls data Friday was the last thing that could change the Fed’s mind,” Mr Kumar said. “We’re all set for a rate rise.”
The euro was down 0.3 per cent against the US dollar. It had surged after Thursday’s ECB announcement.
“The euro dropping away is supportive for the equity markets,” Hantec Markets analyst Richard Perry said.
