European shares gain amid earnings, Draghi bond-buying comments

European shares are higher amid comments from the ECB's Draghi, that it would retain its bond-buying programme amid an ongoing weak inflationary backdrop.

European shares gain amid earnings, Draghi bond-buying comments

European shares are trading higher shortly after midday Wednesday, as investors are buoyed by some upbeat earnings results and news that the ECB could continue its bond-buying program should inflation remain subdued.

Meanwhile, investor caution following US President Trump’s decision to fire his secretary of state and fears over a global trade war, appears limited.

By 1235 BST, the EUROSTOXX 600 was trading 0.37% higher and the EUROSTOXX 50 was up 0.32%. Regional bourses were also in the green. The German DAX gained 0.50%, the French CAC rose 0.31% and the Spanish IBEX was 0.20% in positive territory.

ECB’s policy planning

In a speech earlier Wednesday, the European Central Bank President, Mario Draghi, told his audience that the ECB would likely continue to support its bond buying programme, should the inflationary backdrop remain muted.

While admitting the European economy has strengthened more quickly than the central bank had anticipated, he said the ECB was still carefully monitoring the broader situation.

“There is a very clear condition for us to bring net asset purchases to an end: we need to see a sustained adjustment in the path of inflation towards our aim, which is a headline inflation rate of below, but close to 2% over the medium term,” he said.

“The performance of underlying inflation remains subdued compared with previous recoveries,” Draghi added.

Earnings details

As the ECB’s Draghi told his audience that the central bank would continue to be supportive of the Euro Area’s economic recovery, some earnings releases across the region were also positive.

Adidas shares surged almost 10% as the sportswear retailer announced a €3 billion, multi-year share buyback, upbeat 2017 financial results and an upwardly revised long-term profitability forecast.

Inditex shares rose 2.43% to trade at €24.85, reversing an earlier fall as the European fashion retailer’s Zara stores reported a slowdown in sales growth during 2017.

Prudential shares, meanwhile were also higher as the UK-based financial services business announced plans to split into two separate units.

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