European stock markets rise after ECB holds rate

AFP/LondonEurope’s main stock markets maintained earlier gains yesterday after the ECB and Bank of England held their key rates, forgoing any new stimulus measures. London’s FTSE 100 index of leading companies rose by a slight 0.18% to 6,439.16 points while Frankfurt’s Dax 30 gained 0.26% to 7,939.77 points and in Paris the Cac 40 rose by 0.53% to 3,793.78 points. The Spanish Ibex 35 stock index rose 0.7% to 8,415.50 points, boosted by the solid debt auction the same day in which yields were lower than previous similar sales.The euro increased to $1.3107 from $1.2971 late on Wednesday in New York, while the British pound fell against the European single currency and dollar. Gold prices rose to $1,576.20 an ounce on the London Bullion Market from $1,574 on Wednesday. The European Central Bank yesterday held its main refinancing rate at a historic low of 0.75%, despite concerns that political gridlock in Italy could trigger a resurgence in the debt crisis. The ECB also trimmed its growth forecasts for this year and next as the impact of the bloc’s debt crisis continued to be felt in the 17-country eurozone. The ECB said it saw the eurozone economy contracting by 0.5% in 2013 before recovering to grow by 1.0% next year. It had previously forecast -0.3% and 1.2% respectively. The Bank of England meanwhile voted to hold its reference interest rate at a record-low 0.50%, where it has stood for four years, and opted against increasing its cash stimulus programme to boost a British economy on the brink of recession. In company news, shares in Aggreko, a temporary power supplier, surged 10.30% to 1,939 pence after it announced a rise in annual pre-tax profits thanks to income earned on the back of last year’s London Olympics. Carrefour climbed .95% to €22.23 after the French supermarket giant said its 2012 net profit was three times bigger than the previous year owing mainly to asset sales. But in London, Aviva shares slumped 12.51% to 318.32 pence, as the British insurer slashed its shareholder dividend after tumbling into a net loss last year. The stock had earlier dived as low as 295 pence. Aviva suffered a loss after taxes of £3.0bn ($4.5bn, €3.5bn) in 2012, mainly owing to a massive write-down following the sale of its US business. That contrasted with a net profit of £60mn in 2011. US stocks also rose yesterday in midday trading with the Dow Jones Industrial Average up 0.32% to 14,342.10, after setting a fresh all-time closing high Wednesday at 14,296.24. The broad-based S&P 500 inched up 0.22% at 1,544.42, while the tech-rich Nasdaq Composite rose 0.18% to 3,228.31.