KUALA LUMPUR: Global stocks continued to rise Friday as investors remained buoyed by the European Central Bank’s decision to extend its bond-buying economic stimulus program. South Korea’s benchmark slipped as lawmakers voted to impeach President Park Geun-hye over a corruption scandal.
Britain’s FTSE 100 rose 0.2 percent to 6,944 and France’s CAC 40 was up 0.6 percent at 4,762. Germany’s DAX rose 0.3 percent to 11,209. U.S. shares looked set for more gains, with Dow futures up 0.2 percent and S&P futures almost 0.1 percent higher.
The European Central on Thursday extended its bond-buying economic stimulus program, known as “quantitative easing,” as investors expected. It pushed out the earliest end date for its bond-buying program to the end of next year, from March previous. However, starting in March it will begin spending less on bonds per month. The extension adds $579 billion, seen as a hedge against political uncertainties such as Italy’s recent referendum and elections next year in France, Germany and the Netherlands. China’s slowdown, U.S. rate hikes and the impact of President-elect Donald Trump on growth and global trade also loom large.
“The ECB’s policy change looks like a typical compromise” between those in favor of extending the stimulus and those who wanted to start phasing it out, said CMC’s chief market strategist, Ric Spooner. “The bottom line for markets is that (the stimulus) will continue at a substantial rate for another 12 months with the possibility of being increased if conditions deteriorate.”
The Fed is expected to raise its key interest rate by 0.25 percent at its policy-setting meeting next week, a year after its last rate hike. Investors are watching for clues about whether the Fed will stick to “gradual rate hikes” and how significant fiscal stimulus will be under Donald Trump. U.S. data remains solid, with non-manufacturing business conditions index rising, job openings and hiring remaining strong and jobless claims low.