European stocks climb for day three with all eyes on ECB

European stocks rose for the third day in a row as investors brushed aside fears over the Delta coronavirus variant and instead focused on betting for additional monetary support from the European Central Bank.

The Stoxx 600 stock index opened 0.6% higher, after rising 1.7% on Wednesday. The regional equities gauge was on track to end the week slightly higher and remained close to its all-time high despite a wobble in the global market on Monday. London’s FTSE 100 traded flat.

Investors long wait tThe ECB, at its meeting later Thursday, to signal that it will continue public debt purchases that have eased borrowing costs throughout the coronavirus crisis after its emergency buying program ends in the event of a pandemic (PEPP) of 1.85 billion euros next year.

Such bond buying programs raise the prices of government debt, lower borrowing costs, and can increase stock valuations by inducing investors to accept lower profit or dividend rates relative to stock prices. actions.

“Spikes in pandemic rates are causing markets to worry about the fragility of the economic recovery,” said Zehrid Osmani, manager of Martin Currie’s global trust portfolio. But new lockdowns or other social restrictions are leading “central banks to remain very accommodating,” he said, “which naturally leads you to the equity markets in favor of bonds.”

The yield on German 10-year government debt, which moves inversely to the price of the benchmark eurozone fixed-income security, was flat at minus 0.4% on Thursday, near its lowest since early February. The 10-year US Treasury yield fell 0.02 percentage points to 1.275 percent.

“Recent data from Covid points to another wave of infections, even in countries like the UK which have vaccinated a large part of their population,” said Paul Jackson, global head of allocation research. active at Invesco.

“Against this background, we don’t expect the ECB to signal a policy tightening at the next meeting,” he said, “and we wouldn’t be surprised to see some form of implicit loosening. ”

The euro has remained stable against the dollar at $ 1.1796, having lost 0.6% against the US dollar so far this month.

In Asia, Hong Kong’s Hang Seng index rose 1.7% and South Korea’s Kospi 200 rose 1.3% following a strong session on Wall Street thanks to strong quarterly profits from Coca-Cola, advertising group Interpublic and telecommunications conglomerate Verizon.

Futures markets reported that the S&P 500 would gain 0.1% at the start of trading in New York, while the tech-focused Nasdaq Composite would gain 0.2%.

Brent crude, the international benchmark for oil, fell 0.2% to $ 72.05 a barrel.

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