Stocks rises as ECB fires bazooka, US sheds less jobs

LONDON: European and US stock markets pushed higher on Thursday after the ECB accelerated its stimulus bond buying and the jobs market in the United States improved.

The ECB said after its latest monetary policy meeting that it will ramp up the pace of its pandemic emergency bond buys, in a clear bid to soothe market jitters about a rise in government borrowing costs and inflation.

While the ECB did not increase the overall amount of bond purchases planned, the announcement came as investor nervousness has already pushed up yields and despite the central bank acknowledging that inflation will likely run higher than expected in the short term.

"The central bank doesn't want the eurozone's rising borrowing costs to falter the economic recovery from the pandemic," noted market analyst Fawad Razaqzada at ThinkMarkets.

"As soon as the statement was released, bonds rallied, causing yields to drop and stocks to hit new highs. The euro eased off its earlier highs, but it hadn't moved down too significantly," he added.

Frankfurt's DAX hit a fresh record high, while Paris's CAC 40 also set a fresh one-year high.

However Razaqzada warned that stepping up bond purchases -- the favoured tool of central banks to stimulate the economy since the global financial crisis of 2007-08 -- could push inflation even higher and harm investors later.

Meanwhile, in the United States, first time jobless claims decreased by 42,000 last week to 712,000, both beating expectations and coming in at the lowest since November.

"The key takeaway from the initial jobless claims data is that initial claims are still high, but at least they are moving in a direction that suggests the economy is finding its growth stride again," said market analyst Patrick O'Hare at Briefing.com.

"An economy hitting its growth stride -- and then some -- is exactly what has fired up the cyclical and value plays, which led yesterday's gains," he added.

Wall Street opened higher, with the tech-heavy Nasdaq jumping 1.6 percent. The blue-chip Dow rose 0.3 percent from its record close and the broader S&P 500 climbed 0.7 percent.

Shares in AstraZeneca dropped 2.0 percent in London morning deals after Danish health authorities suspended the use of the pharmaceutical group's Covid-19 vaccine as a precaution after some patients developed blood clots since receiving the jab. Norway later joined Denmark on putting the vaccine on hold.

Key figures around 1430 GMT -

London - FTSE 100: UP less than 0.1 percent at 6,731.01 points

Frankfurt - DAX 30: UP 0.3 at 14,579.33

Paris - CAC 40: UP 0.3 percent at 6,009.79

EURO STOXX 50: UP 0.5 percent at 3,838.91

New York - Dow: UP 0.3 percent at 32,405.41

Tokyo - Nikkei 225: UP 0.6 percent at 29,211.64 (close)

Hong Kong - Hang Seng: UP 1.7 percent at 29,385.61 (close)

Shanghai - Composite: UP 2.4 percent at 3,436.83 (close)

Euro/dollar: UP at $1.1949 from $1.1932 at 2220 GMT

Pound/dollar: UP at $1.3954 from $1.3928

Euro/pound: UP at 85.63 pence from 85.60 pence

Dollar/yen: UP at 108.68 yen from 108.38 yen

Brent North Sea crude: UP 1.5 percent at $68.92 per barrel

West Texas Intermediate: UP 1.4 percent at $65.32 per barrel