Europe Markets

Europe rallies after Draghi raises QE hopes

Europe ends sharply higher after Draghi raises QE hopes

European markets ended sharply higher on Thursday after the European Central Bank hinted that its asset-purchase program would be increased if needed.

The European Euro Stoxx 600 index finished around 2.4 percent higher with strong gains seen across all major bourses. London's FTSE climbed 1.8 percent, while the French CAC and German DAX both provisionally ended 2.2 and 2.7 precent higher respectively.

The ECB, as expected, left interest rates on hold at a meeting on Thursday. But the subsequent press conference revealed that the central bank was increasing the issue share limit in the public sector purchase program from 25 percent to 33 percent.

This boosted market hopes that the central bank could expand its quantitative easing program in coming months, lifting shares and pushing the euro lower. The ECB also downgraded its inflation expectations.

"The central bank has already downgraded its projections for inflation which made it essential that he (Draghi) comfort markets by saying the ECB stands ready to do more if necessary. He didn't say it outright but there was more than a whiff of 'whatever it takes' from the press conference," said Aberdeen Asset Management Investment Manager James Athey in a research note.

ECB watch

Euro zone business growth at 4-year high

Meanwhile, on the data front, euro zone business activity hit a four-year high on Thursday morning. Markit's final August Composite Purchasing Managers' Index (PMI) came in at 54.3, above an earlier estimate of 54.1.

This came after a relatively quiet day in Asia after the volatility of recent weeks. Chinese markets were closed with China kicking off a two-day holiday to commemorate the end of World War II.

Across the Atlantic, U.S. stocks traded about 1 percent higher Thursday, attempting to extend the recent recovery as investors found encouragement from the ECB and U.S. data.

EasyJet soars

The market hasn’t appreciated our worth: Syngenta CEO

In stocks news, Easyjet soared nearly 6 percent at the open after upgrading its profit forecasts for 2015 on record August traffic.

Syngenta, the Swiss agriculture company which recently saw off a $47 billion takeover bid by rival Monsanto, was also in focus after announcing a $2 billion share buyback and the sale of its vegetable seeds business. Its shares ended around 3.4 percent higher.

EDF, the French utilities company, was one of the biggest fallers after announcing further delays to a new nuclear reactor which has already gone several times over budget. Shares in the group ended around 2.2 percent lower.

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