ROME: European stocks closed sharply higher Thursday after the head of the European Central Bank said he is ready to pump more stimulus into the eurozone economy as needed.
The Stoxx Europe 600 SXXP, +2.37% rose 2.4% to finish at 362.24. The broad European benchmark finished near its highs of the session, registering one of its best gains on percentage basis, so far this year.
Stocks vaulted higher as ECB President Mario Draghi emphasized the central bank’s “willingness” to act as risks for the eurozone economy arise. He made his remarks at a Thursday news conference following the ECB’s policy statement. The ECB’s staff lowered yearly projections for eurozone inflation and growth.
Draghi said the central bank will raise its limit for how much of any bond issue it can buy as part of its monthly asset purchases. The limit was raised to 33% from 25%.
The “decision to increase the share repurchase limit suggests that the central bank would like to increase its purchases in certain types of assets, a possible precursor to expanding or extending its [quantitative easing] program in the future,” said Matthew Weller, senior technical analyst at Forex.com, in a note.
The prospect of further stimulus from the ECB drove the euro EURUSD, +0.1259% lower against the dollar, leaving it to buy $1.146 versus $1.1231 as Draghi began speaking. The shared currency bought $1.1107 late Wednesday in New York.
