ECB Action Hopes Lift European Markets to 7-year High

Nigel Thomas
19 Jan, 2015
New York City

Balfour Beatty secured an infrastructure development contract worth up to

[R]4:00 PM Frankfurt – Balfour Beatty secured an infrastructure development contract worth up to £1.5 billion from Scape. Deutsche Telekom plans to invest €23.5 billion for its domestic landline and mobile networks. Schindler Holding lifted net profit forecast for the fourth-quarter of about 900 million francs.[/R]

European markets advanced to record highs in seven years on the expectations that the European Central Bank will announce measures to buy government bonds at the scheduled meeting on Thursday.

The expectation of an action from the ECB gained additional momentum after French President Francois Hollande said that the central bank will decide this week on the government debt program purchase later this week.

Investors are expecting the bond purchase program to be large and at least of 500 billion euros in size and may extend to corporate bonds as well.

In London trading, FTSE 100 index rose 0.2% or 16.04 to 6,566.31 and in Frankfurt the DAX index gained 0.6% or 59.62 to 10,227.39.

In Paris, CAC 40 index increased 0.5% or 19.59 to 4,399.21.

Swiss Market Index rebounded 3.5% despite several brokerages lowered views on several companies after the surprise move by the Swiss National Bank. The market index plunged more than 15% in the last week, the most since the world markets collapse in 2008.

Swiss franc traded near parity to the euro and up 20% before the SNB move to unhinge the currency and let market forces dictate the value.

Balfour Beatty Plc gained 0.9% to 205.90 pence after the U.K.-based infrastructure developer secured an infrastructure development contract worth up to £1.5 billion for the next four years for roads bridges and coastal defense works from Scape.

Deutsche Telekom AG increased 0.8% to €14.16 after the Germany-based telecom company plans to invest about €23.5 billion or $27 billion in the next five-years for its domestic landline and mobile networks and the digitalization of infrastructure.

Evolva Holding SA climbed 4.5% to 1.69 Swiss francs after the Switzerland-based ingredients maker and the U.S.-based Cargill signed an agreement to co-develop a fermentation production process for a food and beverage ingredients.

Schindler Holding AG jumped 2.6% to 130.50 Swiss francs after the Switzerland-based escalators and elevators maker lifted net profit forecast for the fourth-quarter of about 900 million francs compared to 865 million francs reported in the third quarter.