22nd January 2016
A nod towards further quantitative easing (QE) by the European Central Bank (ECB) has seen the FTSE 100 gain some traction this morning.
ECB president Mario Draghi has hinted that further QE could be on the way and has not ruled out further interest rate cut, helping the main UK index gain 69 points, or 1.2%, when markets opened.
The market now sits at 5,742 a slight gain after the 200 point drop witnessed yesterday.
At a press conference Draghi said the bank ‘would review and possibly reconsider our monetary policy stance at our next meeting in early March’.
Draghi also alluded to a possible cut in interest rates which led ING economist Carsten Brzeski to comment:‘We expect [interest rates] to remain at present or lower levels for an extended period of time.
‘What was expected to be a dull first meeting of the year turned out to be an exciting ECB meeting with Draghi opening the door widely for new ECB action in March.
‘Every time it looked as if the ECB was done with its stimulus and willing to wait until all measures have had enough time to unfold their full impact, Draghi puts another log in the fire.’
Eurozone markets also lifted from lows, with the German DAX 30 up 1.3%, the French CAC 40 up 1.4% and Spain’s Ibex rose 1.3%.
US markets also gained, although not as much; the Dow Jones was up 0.6% and the S&P 500 added 0.5%.