Europe Stocks Near Seven-Year High on ECB Stimulus After Greece
European stocks traded near a seven-year high amid optimism about central-bank stimulus, while Greek shares dropped as opposition party Syriza won an election.
The Stoxx Europe 600 Index slipped less than 0.1 percent to 370.20 at 2:50 p.m. in London, after earlier losing as much as 0.5 percent. The ASE (ASE) Index slid 3.5 percent, paring a drop that exceeded 5 percent as Prime Minister-elect Alexis Tsipras formed an anti-austerity alliance with the Independent Greeks. The Stoxx 600 jumped 5.1 percent last week, its biggest gain in three years, as the ECB unveiled an asset-purchase program worth at least 1.1 trillion euros ($1.2 trillion). The gauge closed at its highest level since December 2007.
“Markets are still in a risk-on mode and any news is dwarfed by the ECB stimulus program,” said Alessandro Bee, a strategist at Bank J Safra Sarasin AG in Zurich. “Syriza’s win won’t be as bad for markets now as it could have been a few months ago. Tsipras is less aggressive and willing to negotiate.”
The Stoxx 600 has rallied 12 percent since a low on Jan. 6 in anticipation of additional central-bank stimulus measures. National benchmark equity gauges from Spain and Portugal advanced more than 1 percent on Monday. The Swiss Market Index added 1.5 percent for a second day of gains as the franc slipped against the euro. Germany’s DAX Index climbed 0.8 percent.
Greek Stocks
Even as Greek shares dropped, the ASE trimmed a loss of as much as 5.6 percent. It index had posted its biggest jump since October on Friday. Now Tsipras’s mandate is to confront the nation’s program of austerity imposed in return for pledges of 240 billion euros ($269 billion) in aid since May 2010 and to deliver his election pledges including a writedown of Greek debt while persuading European creditors to keep aid flowing.
Piraeus Bank SA, National Bank of Greece SA and Alpha Bank AE lost more than 10 percent, posting the biggest drops among ASE shares.
Aer Lingus Group Plc added 1.7 percent and International Consolidated Airlines Group SA climbed 5.5 percent as the Irish carrier is mulling IAG’s takeover offer, sending travel stocks higher. Air France-KLM Group and Deutsche Lufthansa AG increased more than 2.5 percent.
Automakers rallied the most among 19 industry groups in the Stoxx 600. Fiat Chrysler Automobiles NV added 2.9 percent and Bayerische Motoren Werke AG gained 1.9 percent.
Delhaize Group, the owner of the U.S. Food Lion stores, advanced 5.9 percent after reporting that preliminary underlying operating profit for 2014 was better than estimated.
Commodity producers dropped for a second day as gold slipped. BHP Billiton Ltd. fell 1.8 percent, Fresnillo Plc lost 2.6 percent and Randgold Resources Ltd. fell 2.3 percent.
Source: bloomberg – Europe Stocks Near Seven-Year High on ECB Stimulus After Greece
