Europe close: Stocks move higher as ECB chief retains cautious streak
By Alexander Bueso
Date: Wednesday 10 Apr 2019
(Sharecast News) - Stocks on the Continent finished mostly higher on Wednesday with caution on the part of European Central Bank chief Mario Draghi helping to reassure investors ahead of the outcome of the EU leaders' summit which was expected later in the day.
But even as the ECB opted to stay put on all its main interest rates, with the main refinancing rate at 0.0% and the deposit rate at -0.4%, some market participants remained wary.
On that note, IG's Chris Beauchamp told clients:"European markets were given a lift by the ECB, but the gains were limited thanks to the cautious tone adopted by Mario Draghi. The ECB is determined to do what it can, but short of fresh QE it will find it is more of a prisoner of events than a director of them.
"Trade wars and Brexit dominate, and neither seem to offer easy solutions. While European stocks have recovered, there is still much to be done to repair the economic strength of the eurozone."
ECB boss Mario Draghi was also in a cautious mood on Wednesday, opting in post-meeting press conference to make no references to the slight improvement seen in recent data out of the euro area and globally since the last meeting, when it unveiled fresh liquidiy measures.
That, said Antonio Garcia Pascual at Barclays, "would appear to show a policy bias toward easing more if needed, even if the type of measures may not have been discussed yet."
Against that backdop, by the close the benchmark Stoxx 600 had edged up by 0.26% to 386.68, alongside a rise of 0.47% to 11,905.91 for the German Dax and an advance of 0.25% to 5,449.88 for the Cac-40.
Milan's FTSE Mibtel on the other hand ended the session almost exactly flat, alongside a similar outturn on the Ibex 35.
Front month Brent crude oil futures meanwhile were up by 1.2% at $71.45 a barrel on the ICE.
The pound meanwhile added 0.31% against Sterling to 1.1627.
In the background, reports were indicating that Europe would offer the UK an extension to Article until December 2019 or March 2020, but some capitals are wary of extending Westminster's sway over the Continent's affairs even as it charts a course out, in particular as regards the bloc's budget decisions.
On the British side of things, market observers said Prime Minister Theresa May would face a furious outcry from Brexiteers if she goes for a long extension, with CMC Markets UK's Michael Hewson saying it would raise the odds of a new general election being called.
Readings on Italian and French industrial production surprised to the upside on Wednesday.
According to ISTAT, the former jumped at a 0.8% month-on-month pace in February, helped in part by growth of 1.1% in that of capital goods.
INSEE meanwhile reported that French industrial production rose by 0.4% versus January, on the back of a 3.0% increase in the output of transport equipment.
European capital markets were in rude form, amid a raft of flotation announcements.
Among those was Norwegian online classified ads group Adevinta, which had fetched a valuation of over £5bn the day before.
And according to The Times, Travelex's owner, FinAblr, was plotting floating on the London Stock Exchange in a transaction that might see the company fetch a valuation of roughly £2.29bn.
In parallel, shares of Network International rocketed in their first day of trading in London.
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