European Stock Markets Biggest Rise After ECB Policies

European stock markets rise on Friday because of the ECB monetary policies, ForexSQ experts says after Mario Draghi speech on Thursday the European stocks markets rise each day as investors are too optimistic to the Eurozone economy.

Mario Draghi Speech Impact On European Stocks

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European stocks on Friday extended their biggest weekly rally since February amid supportive policies from the European Central Bank. The Stoxx Europe 600 Index added 0.7 percent at noon in London, taking its five-day advance to 4.4 percent.

Italy’s FTSE MIB Index fell 0.4 percent, after its biggest three-day jump since July. Gains in its lenders boosted the benchmark in previous sessions as the ECB expanded the parameters of its asset-buying program in a move that would help bank profitability. While Stoxx 600 lenders also halted a winning streak, they are still set for the biggest weekly advance since 2011.

  • Despite the strong rally since Italy’s referendum, European shares have not yet attracted fresh investment. The region’s equity funds saw outflows of $1 billion in the week to Dec. 7, a report from Bank of America Corp.’s Merrill Lynch unit showed. Investors have withdrawn about $100 billion from such funds this year.
  • So-called defensive shares recovered on Thursday after losses earlier in the week, while equities seen benefiting from economic growth trimmed gains from previous sessions. Drugmakers and real estate companies were among the best performers in the Stoxx 600, while banks, insurers and carmakers trailed.
  • Technical analysis charts show signs of overheating in European stocks, with the Stoxx 600’s relative strength index rising above 70, signaling it’s in overbought territory. A pullback below that threshold could trigger more declines. The gauge of lenders yesterday reached its most overbought level in almost three years.
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