European stocks rose, trimming their worst January fall since 2008, after the Bank of Japan’s added stimulus stoked optimism of policy support for global growth.
The STOXX Europe 600 Index added 1.9 percent at 4:34pm in London on Friday, swinging to a weekly gain of 0.9 percent after the Bank of Japan (BOJ) announced a negative interest rate. In the US, a report showed slower economic growth last quarter, after US Federal Reserve officials said this week they would watch how global financial developments affect the outlook.
“We were not expecting such a bold move from BOJ so the market is cheering their decision,” Market Securities chief European strategist Stephane Ekolo said in London. “As the BOJ has done its move, now the ECB [European Central Bank] will follow suit. When we look at all the negative news we’ve had lately, this is a bit of sunshine in the cloudy picture.”
Equities have had a wild ride this year as China’s slowdown and an crude oil rout spurred anxiety about the global economy, sending markets from Asia to Europe and the Americas into bear territory. After reaching a 15-month low last week, the STOXX 600 got a boost from Mario Draghi’s comments that the ECB might reconsider its policy stance in March. Friday’s gains trimmed its losses this month to 6.7 percent.
Lenders in Italy and Spain were among the best STOXX 600 performers, pushing their national benchmarks to some of the biggest gains in Europe.
Banco Popular Espanol SA rallied 7 percent after its quarterly net interest income improved, while Banco de Sabadell SA jumped 12 percent on better-than-estimated earnings. Banco Popolare SC and Banca Popolare di Milano Scarl, said to be in merger talks, gained 7.2 percent or more.
The IBEX 35 Index and the FTSE MIB Index rose at least 2.2 percent.
Among other stocks moving on corporate news, Gamesa Corp Tecnologica SA surged 19 percent after a report that Siemens AG is exploring an acquisition of the company. Telefonica SA advanced 3.6 percent after saying it would offer employees early retirement in a plan that would save money in the long term.
ThyssenKrupp AG slid 3.2 percent after its chief executive said he sees “major risks” for Europe’s steel industry. ArcelorMittal and Voestalpine AG declined more than 2.4 percent, dragging the region’s commodity producers lower.
All STOXX 600 industry groups have declined this month, with banks, miners and auto stocks leading the losses.
Among the national benchmarks, Italy’s FTSE MIB was the worst performer, down 13 percent. Germany’s DAX, heavily weighted by exporters, dropped 8.8 percent for its largest monthly drop since August last year.
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