European stocks hit new record after ECB improves recovery outlook

Published by: MRT

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European stocks hit new record after ECB improves recovery outlook

For Shreyashi Sanyal and Sruthi Shankar

Jun 10 (Reuters) – European stocks rose slightly to new highs on Thursday after the European Central Bank (ECB) improved its prospects for economic recovery and vowed to maintain stimulus flows, while travel shares fell. after a recent bullish streak.

* The pan-European STOXX 600 index was up just 0.1%, but closed at a new record high of 455.76 points, while the Eurozone equity index was down 0.1%.

* ECB President Christine Lagarde said central bank authorities agreed to make more emergency purchases during the next quarter “a significantly faster pace than during the first months of the year”, but did not provide details on expected levels.

* The central bank now estimates that the euro zone will post 4.6% economic growth in 2021, up from the 4% forecast in March. Inflation projections were also elevated and the ECB now expects prices to rise 1.9% this year, in line with its target and above its latest estimate of 1.2%.

* “The main mission of the ECB today was to avoid any stimulus withdrawal speech and not to damage the still tentative economic recovery or to allow bond yields to skyrocket prematurely,” said Carsten Brzeski, global director of macroeconomics at ING.

* “It fulfilled its mission: the ECB seems to have bought some time without starting the stimulus withdrawal talk.”

* Bank stocks, sensitive to interest rates, rose 0.4%, while tech stocks gained 0.9%.

* The meeting came at a time when data from different world economies point to rising inflationary pressures, particularly in raw materials, as countries recover from long lockdowns by COVID-19.

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