European markets bounced back from Wednesday’s rout to close uniformly higher on Thursday evening following a bunch of reassuring comments from ECB president Mario Draghi.
Of the major European indexes, the biggest winner on the day was the FTSE MIB index in Italy, which closed the day up by 4.1% at 18,704 points, wiping out most of the losses it saw yesterday. It was helped higher by Draghi’s comments about the Italian banking system.
The Eurostoxx 50, an index of continental Europe’s most powerful companies, was the next best performer of the major bourses, ending 2.36% in the green, a gain of 67.91 points.
Here’s what happened elsewhere on the continent:
- Germany’s DAX 30 — up 1.92%
- Britain’s FTSE 100 — up 1.84%
- France’s CAC 40 — up 1.92%
- Spain’s IBEX 35 — up 1.99%
- The Netherlands’ AEX — up 2.69%
Speaking after the ECB announced that it was leaving its base interest rate untouched at -0.3%, Draghi said that there are “no limits” to how far the ECB will go to ensure it meets inflation targets, and that the bank has “power, willingness and determination” to do so.
Draghi’s comments were a little reminiscent of his famous comments in 2012, when he said that the ECB would do “whatever it takes” to prevent a collapse in the Eurozone, a move which soothed markets back then.
Markets across Europe were also calmed by the rise of the oil price on the day. Both benchmarks, West Texas Intermediate, and Brent soared after the release of weekly data on supply in the USA. At the close, WTI was up 3.5% to $29.34 per barrel, while Brent gained 3.6% to trade at $28.89.
Whether this is the end of the horrible start to 2016 felt by the markets, or just a dead cat bounce, remains to be seen. We’ll find out tomorrow.