Asian stocks rise after ‘unprecedented’ European Central Bank (ECB) actions
Asian stocks rose after the European Central Bank introduced aggressive easing measures aimed at stimulating the eurozone economy.
The ECB become the first major central bank to introduce negative interest rates, which will see it become cheaper for banks to lend money to businesses.
It cut the deposit rate for banks to zero to -0.1% and reduced the benchmark interest rate to 0.15% from 0.25%.
Japan’s Nikkei 225 opened 0.4% higher while Australia’s ASX 200 rose 0.3%.
This followed a rally on Wall Street on Thursday, which saw the S&P 500 and Dow close at a new record high.
European stock markets and the euro currency also logged gains after the ECB announcement.
In addition to the interest rate cuts, the ECB will offer a package of cheap long-term loans to banks which are worth up to 400bn euros (£325m).
ECB President Mario Draghi also signalled there may be more easing measures to come.
“Are we finished? The answer is no,” he said in response to a question about the potential for more stimulus.
CMC Markets analyst Max Ho called the ECB’s moves “well-telegraphed” but “drastic” in nature.
“We witnessed history in the making,” he said. “While this move to cut deposit rates to a negative is considered to be bold and unprecedented, some observers are not convinced that it will have a significant impact on existing bank lending.”
Source: BBC
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