European stocks pause after strong rally; ECB stimulus boost up financials

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European stocks pause after strong rally; ECB stimulus boost up financials

On Thursday, following a strong rally this week, a gauge of European bourses had rounded off the day sharply lower, as investors seemed to be locking up profits, however, a number of eurozone lenders surged intransigently after the ECB (European Central Bank) had extended its stimulus program in order to revive the ailing eurozone economy.

In point of fact, Thursday’s rally of the bloc’s lenders was almost entirely prodded by the reveal of ECB stimulus, while the ECB policymakers had approved a plan to expand its bond buy back programs by €600 billion to €1.35 trillion, while the ECB Chair Lagarde’s downbeat projection regarding the eurozone’s economic growth this year, had boosted up prospects of further stimulus by September this year.

Besides, at its Thursday’s statement, the ECB was quoted saying that it had reached an accord to heighten up the size of its emergency bond buying by a larger-than-anticipated €600 billion as beforementioned and the purchases would continue until end-2021, six-month longer than initially planned.

Apart from that, while ECB had also held its benchmark interest rate steady at -0.5 per cent, the bloc’s banks’ index .SX7E surged as much as 1.1 per cent, however the eurozone stock index, STOXXE had rounded off the day 0.2 per cent lower.

ECB stimulus boost up financials, others falter amid a stronger euro

Concomitantly, although a majority of lenders across the bloc had reported solid gains on the day’s market wind down, the regional pan-European STOXX 600 ended up the day down by 0.7 per cent, mostly led by the declines in automakers, utilities alongside healthcare stocks.

Citing statistics, on the day’s European market wrap-up, London’s FTSE 100 faltered 0.64 per cent to 6,341.44 and Frankfurt’s DAX dwindled 0.45 per cent to 12,430.56, while the French CAC 40 had curbed out 0.21 per cent to wind down the day at 5,011.98.

Elsewhere in the Europe, Madrid’s benchmark IBEX 35 had shrugged off 0.78 per cent to 7,566.80, while the Italy’s FTSE MIB ended the day almost flatlined at 19,634.03 Meanwhile, addressing to a majority of investors’ move to lock up profits following a week of strong run amid the pandemic outbreak, a market analyst at CMC Markets, David Madden said on the day’s European market closure, “Monday, Tuesday and Wednesday were a great run with the expectation of additional easing. We got that and now it seems that traders are taking the money off the table for now.