VIENNA (dpa-AFX) - The European markets finished sharply higher again Friday, extending their gains after the European Central Bank announced a massive stimulus program at its meeting yesterday. The ECB will begin making monthly purchases of public and private sector securities in March in the amount of EUR 60 billion. The ECB will inject over 1.0 trillion euros into the euro zone economy to stimulate the economy. Investor sentiment also benefitted from some better than expected Eurozone economic data.
Investors will be watching for the result of elections in Greece on Sunday. The Syriza party is expected to be victorious this weekend. If they do come to power, it is expected that they will seek debt renegotiation.
Eurozone private sector grew at the fastest pace in five months in January, flash survey data from Markit Economics showed Friday. The composite output index rose more-than-expected to a five-month high of 52.2 in January from 51.4 in December. Economists has forecast it to rise to 51.7 nominally.
Germany's private sector remained in expansion territory in January, signaling a further rise in the private sector output. The flash composite output index rose to 52.6 in January from 52 in December. This was the strongest growth in three months.
The French private sector contracted further at the start of 2015, flash data from Markit Economics showed Friday. The composite output index fell to 49.5 in January from 49.7 in December.
French business confidence remained stable in January, survey data from the statistical office Insee showed Friday. The business confidence index for manufacturers held steady at 99 in January as expected by economists. British retail sales logged an unexpected growth in December, driven by food sales, while economists were looking for a decline after a rebound in November on Black Friday sales.
The volume of retail sales, including automotive fuel, increased 0.4 percent month-over-month in December, but the growth was slower than the 1.6 percent rise in November, figures from the Office for National Statistics showed Friday. Sales were expected to decline 0.6 percent.
Results of a quarterly survey by the European Central Bank revealed that euro area inflation forecasts for this year and next were slashed, mainly due to lower oil prices.
Average inflation forecast for this year was cut to 0.3 percent from 1 percent seen in November and the outlook for 2016 was reduced to 1.1 percent from 1.4 percent, results of the ECB Survey of Professional Forecasters for the first quarter of 2015 showed Friday.
'According to SPF respondents, the main factor behind the strong downward revision and low inflation forecast in 2015 is the sharp drop in oil prices observed since mid-2014,' the ECB said.
'Around one in six (or 10 out of 58) respondents forecast a negative annual inflation outcome in 2015.' Survey respondents expect oil prices to increase gradually from current low level after 2015.
The Euro Stoxx 50 index of eurozone bluechip stocks increased 1.90 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.87 percent.
The DAX of Germany climbed 2.05 percent and the CAC 40 of France rose 1.93 percent. The FTSE 100 of the U.K. gained 0.53 percent and the SMI of Switzerland finished higher by 2.02 percent.
In Frankfurt, Adidas climbed 3.96 percent. The company reported higher sales in fiscal 2014, with both top and bottom-line reaching financial targets on an underlying basis. Adidas also announced a definitive deal to sell its Rockport business for $280 million.
BMW finished with a gain of 4.91 percent and Daimler added 3.21 percent. Volkswagen also increased by 2.93 percent.
Bayer ended the session higher by 4.02 percent.
In Paris, Renault closed higher by 2.16 percent and Peugeot added 2.03 percent.
Airbus gained 4.12 percent and Accor increased by 4.25 percent. LVMH climbed by 2.90 percent and Pernod-Ricard rose by 4.35 percent. Danone added 3.95 percent.
Thales SA dropped by 3.90 percent. Warship maker DCNS, in which Thales holds a 35 percent shareholding, is now expected to post a net loss of around 300 million euros for full year 2014.
In London, mining stocks turned in a weak performance, as commodity prices declined. Anglo American dropped by 3.62 percent and BHP Billiton lost 1.86 percent. Glencore declined by 5.82 percent and Fresnillo fell by 1.97 percent. Rio Tinto decreased by 2.81 percent and Randgold Resources finished down by 2.43 percent.
Spanish telecom operator Telefonica S.A. entered into an exclusivity agreement with Hong Kong billionaire Li Ka-shing's Hutchison Whampoa Ltd. for the sale of its UK mobile business, Telefonica UK or O2, for about 13.5 billion euros. Telefonica gained 3.37 percent in Madrid.
China's manufacturing sector contracted barely in January, the latest survey from HSBC Bank showed on Friday with a PMI score of 49.8. That beat forecasts for 49.5 and was up from 49.6 in December, although it remained below the boom-or-bust line of 50 that separates expansion from contraction.
Existing home sales in the U.S. rose roughly in line with economist estimates in the month of December, according to a report released by the National Association of Realtors on Friday, with sales rebounding from the steep drop seen in November.
NAR said existing home sales rose 2.4 percent to a seasonally adjusted annual rate of 5.04 million in December after tumbling 6.3 percent to a downwardly revised 4.92 million in November. Economists had expected existing home sales to climb to an annual rate of 5.05 million from the 4.93 million originally reported for the previous month.
Reflecting positive contributions from a majority of components, the Conference Board released a report on Friday showing that its index of leading U.S. economic indicators rose by slightly more than anticipated in the month of December.
The Conference Board said its leading economic index climbed by 0.5 percent in December following a downwardly revised 0.4 percent increase in November. Economists had expected the index to rise by 0.4 percent compared to the 0.6 percent advance originally reported for the previous month.
Copyright RTT News/dpa-AFX
© 2015 AFX News
