Europe close: Stocks recover after midday wobble as ECB reiterates goals
By Alexander Bueso
Date: Tuesday 05 May 2020
(Sharecast News) - Stocks across the Continent finished higher despite a ruling from Germany's highest court that called into question some aspects of the European Central Bank's main bond purchase programme, the so-called Public Sector Purchase Programme.
The court gave the ECB a three-month deadline to explain the rationale behind the PSPP, under which it had bought nearly €2.19trn of bonds since 2014.
Central bankers in Frankfurt convened an emergency meeting in response to analyse the decision and issued a statement reiterating the monetary authority's full commitment to ensuring that its policy decisions were transmitted to "all parts of the economy and jurisdictions".
A spokesman from the European Commission also weighed in, reiterating the primacy of the European Union laws.
Against that backdrop, by the end of trading, the benchmark Stoxx 600 was up by 2.15% to 335.50, alongside a 2.51% advance on the German Dax to 10,729.46 while the FTSE Mibtel put on 2.06% to 17,387.38.
Rising on the back of the German court's decision, the yield on the benchmark 10-year Italian government bond was 11 basis points higher to 1.86%, having earlier risen as far as 1.93%.
Euro/dollar was knocked down 0.56% to 1.0846 alongside.
Front month Brent crude oil futures on the other hand climbed 14% to $31.01 a barrel on the ICE, amid 'market talk' of economies reopening and US oil storage facilities filling up less quickly.
The Stoxx 600's oil and gas sector sub-index in turn rose 6.45%.
Spanish oil major Repsol and sector peer Total were high-flyers on Tuesday following the release of their second quarter numbers.
On the economic front, the number of officially unemployed in Spain jumped by 7.97% in April from the month before to hit 3.831m.
At the euro area level meanwhile, Eurostat reported that producer prices in the single currency bloc fell at a month-on-month pace of 1.5% in March (consensus: -1.3%).
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