Europe stocks gain fourth day to extend highest level since 2008
By Bloomberg
European stocks advanced for a fourth day, extending their highest level in seven years, amid speculation that the European Central Bank will announce a plan for quantitative easing this week.
The Stoxx Europe 600 Index rose 0.5 percent to 354.84 at 9:02 a.m. in London, as banks and financial-services companies led gains among the 19 industry groups. The equity benchmark has rallied 4.5 percent in the four days since the Swiss central bank unexpectedly abandoned its currency peg against the euro, a move that increased speculation of a government-bond buying program from the ECB.
“The market is very clearly expecting a significant move from the ECB,” said Alex Scott, who helps oversee about 7 billion pounds ($10.6 billion) as deputy chief investment officer at Seven Investment Management Ltd. in London. “As optimism builds about that stimulus package this week, it’s critical for the ECB to signal that QE will continue until Europe’s growth problems are solved. Monetary policy needs to do the heavy lifting at the moment to create an environment in which confidence can continue to recover.”
ECB President Mario Draghi will make his biggest push yet to steer the euro area away from deflation by introducing quantitative easing at the Jan. 22 meeting, according to 93 percent of respondents in a Bloomberg News survey. The ECB president will probably announce a 550 billion-euro ($637 billion) bond purchase program, economists say.
German Confidence
In Germany, a report from the ZEW Center for European Economic Research due at 11 a.m. Frankfurt time may show investor confidence rose in January, according to forecasts.
Standard & Poor’s 500 Index futures added 0.3 percent before U.S. markets open from a three-day weekend. The MSCI Asia Pacific Index advanced 0.8 percent as data showed Chinese gross domestic product expanded 7.3 percent in the three months through December from a year earlier, compared with the median estimate of 7.2 percent. Industrial output and retail sales for December also beat forecasts.
Among stocks moving on corporate news, Royal Philips NV gained 3.5 percent as Financieele Dagblad reported that private equity firms KKR & Co. and CVC Capital Partners Ltd. have a joint interest in the company’s lighting unit.
Novozymes A/S climbed 4.7 percent after fourth-quarter profit exceeded estimates. Deutsche Lufthansa AG gained 2.9 percent as Barclays Plc recommended buying the shares.
SAP SE dropped 3.8 percent after the largest maker of business-management software cut its 2017 profit target.