It was a slow start to equity markets this morning, with modest and unconvincing gains seen on most of the European indices in the early part of trade, with thin volumes. Market did however take their cue from major American stocks, with gains of around half of one percent by mid-afternoon our time matched by European equities. Momentum from last week’s ECB press conference appeared to feed through to this week, as a spokesman for the German government backed the bond-buying plans outlined by Mario Draghi. Yields on short dated Italian and Spanish government debt continued to decline (with prices rising) as investors priced in ECB intervention at the short end of these yield curves in an attempt to prevent the unsustainable refinancing rates.
The FTSE 100 lost a bit of ground towards the close, although managed to finish 0.4% higher at 5809, led by Banks and miners with the traditionally more defensive sectors of utilities and pharmaceuticals populating the lower end of the index. The Spanish IBEX put on an impressive 4.4%, with the French CAC and the German DAX appreciating closer to 1%.