A roundup of trading on major world markets:
NEW YORK – The European Central Bank’s larger-than-expected stimulus plan to fend off slow growth and deflation in the eurozone has given US shares a boost in opening trade.
In the final hour of trade, the Dow Jones Industrial Average added 260.05 points (0.48 per cent) at 17,814.33.
The broad-based S&P 500 was up 30.44 points (0.49 per cent) to 2,062.52, while the tech-rich Nasdaq Composite gained 78.72 points (0.23 per cent) at 4,746.09.
LONDON – European stocks have rallied on the ECB’s announcement it will inject over 1.0 trillion euros of stimulus into the stagnant euro zone economy, while the euro sank against the US dollar.
The pledge by European Central Bank chief Mario Draghi to buy 60 billion euros ($A85 billion) of bonds per month exceeded market expectations that the monthly pace of the quantitative easing, or QE program of asset-purchases would be 50 billion euros.
Frankfurt’s DAX 30 climbed 1.32 per cent to a new record close of 10,453.62 points, while the CAC 40 in Paris shot up 1.52 per cent to 4,552.80 points.
The Milan stock market jumped 2.44 per cent and Madrid 1.70 per cent in value.
In Britain, which is not part of the eurozone, the FTSE 100 index of top companies rose 1.02 per cent to end the day at 6,796.63 points.
In foreign currency trading, the euro sank against the dollar to $US1.1401, its weakest level since early November 2003, around 1700 GMT following the ECB announcement compared with $US1.1620 beforehand.
The program of sovereign bond purchases comes after eurozone inflation turned negative in December, stoking fears that the 19-nation eurozone is on the brink of a dangerous deflationary spiral of falling prices.
“Mario Draghi has been left with little choice than to begin a more robust than expected quantitative easing program in a bid to awake the economies of the eurozone from their slumber,” said Dennis de Jong, boss of trading site UFX.com.
“This play is seen by many as the last roll of the dice for the beleaguered euro. QE has had some success in the US and UK, but with such a patchwork of economies and banking systems in the eurozone, the jury is very much out.
“There will be a lot of people holding their breath over the coming months,” he said.
The ECB chief also kept the door wide open to further purchases.
“They are intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation,” Draghi told a news conference.
The purchases, due to start in March, will thus total slightly more than 1 trillion euros.
“Given the importance of market effects as a key aspect of QE, the initial market reaction could be a strong steer to its ultimate impact,” said Jonathan Loynes, chief European economist at research consultancy Capital Economics ahead of the decision.
HONG KONG – Asian markets have extended their rally this week, while the euro dipped ahead of a much-anticipated European Central Bank policy meeting that is forecast to see it introduce more monetary easing measures.
Tokyo added 0.28 per cent, or 48.54 points, to end at 17,329.02 on Thursday and Seoul was flat, dipping a marginal 0.41 points to 1,920.82.
Hong Kong rose 0.70 per cent, or 170.05 points, to 24,522.63 and Shanghai gained 0.59 per cent, or 19.73 points, to 3,343.34. The mainland China index has recovered almost all the losses it suffered on Monday in reaction to a regulatory crackdown on margin trading.
Eyes were firmly on the meeting later on Thursday of the ECB.
WELLINGTON – New Zealand shares have retreated, led by power companies Meridian Energy and Mighty River Power as they dropped from record highs with investors looking to crystallise recent gains.
The NZX 50 Index fell 25.707 points, or 0.5 per cent, to 5647.145 on Thursday.
