Upward reaction in the European markets with a push from the ECB

With significant gains of more than 1%, the European indices stopped the downward series of the last few days, receiving a boost from the announcement of a new tool by the ECB against the pressures on the bonds of the euro area countries.

In particular, the pan-European Stoxx 600 index completed its trading with an increase of 1.42% to 413.1 points, with the travel and leisure sector leading the profit with a jump of 3.4%, followed closely by the banking index SX7E at + 2.7%.

The high capitalization of the Stoxx 50 moved even better with + 1.7% at 3,533 points, while on the domestic board the German DAX strengthened by 1.36% completing at 13,485 points, the French CAC 40 closed at 6,030 points with +1,35 %, as well as the British FTSE 100 which rose 1.2% to 7,273 points.

The day’s performance was in Milan, as the sellers’ target country saw a significant de-escalation of pressures after the ECB announcements, with the FTSE MIB jumping 2.9% to 22,473 points, while the Spanish IBEX 35 strengthened by 1.3% and finished at 8,174 points.

In individual stock movements, Swiss software company Temenos topped the Stoxx 600 with a 7.9% jump after winning a digital transformation contract in a US banking group.

The Swedish healthcare company Getinge had the opposite course, with a dip of more than 17% after the downgrade of its outlook for 2022.

In the news of the day, which restored significant calm to Europe’s investor ranks, the ECB held an emergency meeting amid strong pressure on the region’s bonds and announced a new counter-risk to spreads, as well as flexibility in reinvesting funds from bonds expiring in the emergency pandemic program.

In this climate, the yield of the ten-year Italian title that had exceeded 4.15% fell significantly to 3.9%, as well as the corresponding Greek, which from 4.7% now moves to 4.2%.

In any case, of course, there is still a long way to go to bring the cost of borrowing back to sustainable levels.

As AJ Bell analyst Danni Hewson points out, “the ECB has shown that it is serious about tackling the price spikes that have led to the recent turmoil, but markets are not convinced that this particular tool will be strong enough to does what needs to be done “.

Elsewhere, investors’ eyes are on the other side of the Atlantic, where the Fed is announcing new monetary policy decisions today, with the market expecting its biggest rate hike since 1994, at a brutal 75 basis point. (0.75%).

In the same context, the Bank of England is expected to proceed tomorrow with the fifth consecutive increase of its own interest rates.