European Central Bank (ECB) vice-president Vitor Constancio addressing a news conference after a meeting of the ECB Governing Council in St Julian’s, outside Valletta, Malta, yesterday. ECB chief Mario Draghi’s comments at the meeting sent the eurozone markets soaring.

AFP/London

Europe’s main stock markets rose and the euro slumped yesterday after the European Central Bank said it would review its monetary policy stance in December, raising expectations of more economic stimulus in the eurozone.
“The degree of monetary policy accommodation will need to be re-examined at our December meeting,” ECB chief Mario Draghi told a news conference, after the guardian of the euro held its key interest rate unchanged at 0.05%.
For now, the ECB council meeting in Malta yesterday took no new measures to boost chronically-weak inflation in the 19 countries that share the euro, with Draghi adding that “inflation rates will remain very low in the near term”.
Draghi’s comments sent eurozone markets soaring. Frankfurt’s DAX 30 jumped 2.48% to close at 10,491.97 points and the Paris CAC 40 gained 2.28% to 4,802.18 points compared with Wednesday’s close.
London’s benchmark FTSE 100 index edged up 0.44% to finish at 6.376,28 points, with traders mostly brushing aside upbeat British retail sales data.
In foreign exchange deals, the ECB’s comments sent the euro, tumbling to $1.1156 from $1.1339 late on Wednesday in New York.
“As expected his (Draghi’s) repeated mantra about the ECB implementing additional stimulus measures if needed, as a tool to promote economic growth within Europe was approved by market participants,” said FXTM research analyst Lukman Otunuga.
“Mario Draghi’s extremely dovish comments hit the currency markets like a double espresso — jolting them out of the torpor with which they had greeted the ECB’s decision to hold interest rates,” said David Lamb, head of dealing at foreign exchange specialists FEXCO.
“Such a strong signal that the European money presses will be set rolling again soon has sent the euro slumping.”
In addition to rate cuts, the ECB has launched a stimulus programme known as quantitative easing or QE, under which it plans to purchase more than 1.0tn euros in bonds at a rate of 60bn euros per month, at least until September 2016.
“We think that the bank will probably opt to increase the pace of its purchases, from 60bn euros per month to perhaps 80bn,” Jennifer McKeown at Capital Economics suggested as the ECB’s next stimulus move.
US stocks on Thursday also climbed, following European equity markets upward on ECB hints of more monetary stimulus in December.
Near midday in New York, the Dow Jones Industrial Average was up 1.43% at 17,414.90.
The broad-based S&P 500 rose 1.29% to 2,044.96, while the tech-rich Nasdaq Composite Index gained 1.34% to 4,905.08.