Draghi Comments Lift European Markets

Lucy Stoeva
21 Jan, 2016
New York City

European Central Bank left key lending rate on hold and showed willingness to review monetary policy. Deutsche Bank warned of an annual loss of

[R]4:00 PM Frankfurt – European Central Bank left key lending rate on hold and showed willingness to review monetary policy. Deutsche Bank warned of an annual loss of €6.7 billion due to write-downs, litigation charges and restructuring costs. Pearson plans to cut 4,000 jobs.[/R]

European equities advanced on Thursday in a seesaw trading session ahead of the meeting of the European Central Bank but recovered ground after the central bank left rates unrevised.

The market rally follows more than 2% losses on Wednesday amid sliding oil prices, turmoil in the banking sector, and concerns over the slowdown of the Chinese economy,

ECB left its key lending rate on hold and President Mario Draghi showed willingness to review and reconsider monetary policy at the next meeting in March after the recent market turmoil and ongoing worries of global slow down.

Italian banks recovered from the panic selling brought by liquidity concerns. Banca Monte dei Paschi soared 38.6%.

In London, FTSE 100 index gained 84.85, or 1.5%, 5,758.43 and in Franfurt, the DAX index rose 210.04, or 2.24%, to 9,601.68.

In Paris, the CAC 40 index was up 50.05, or 1.21%, to 4,175.

bioMérieux S.A surged 10.4% to €111.8 after the French developer of medical tests for infectious diseases, cardiovascular emergencies and targeted cancers, reported €2 billion in annual sales, representing 7.1% organic growth.

Every region exhibited growth but the strongest markets were the Americas, where sales rose 16%.

Sales of FilmArray, a product for syndromic molecular testing of infectious diseases, grew by 80% and recorded fast expansion of the installed base.

The acquisition of BioFire in 2015 also was a key growth driver.

The company forecasts sales increase of 6% to 8% over 2016 at constant exchange rates.

Deutsche Bank AG slid 6.6% to €16.54 and traded near four-year lows after the German bank warned of a fourth-quarter loss of €2.1 billion due to write-downs, litigation charges and restructuring costs.

For 2015, the banks expects a loss of €6.7 billion.

Logitech International soared 10.7% to 14.95 Swiss francs after the Swiss-American technology accessories maker reported better-than-expected quarterly results.

Non-GAAP operating profit was $74.2 million for the third quarter ended Dec. 31, a decline of 1.5% from the previous year, due to dwindling demand for computer accessories and despite the growth in the music and video areas.

Sales increased 3% to $621 million.

Pearson Plc jumped 16.3% to 765 pence after the U.K. based education publisher said it would cut 4,000 jobs, or 10% of its workforce, in a new cost-saving initiative.

The company also announced that it would maintain its dividends at 2015 year levels.

Rémy Cointreau SA soared 4.3% to €62.54 after the French maker of the Rémy Martin Cognac reported sales increased 11% to €298.4 for the three months ended December 31.

Sales, excluding exchange rate movements, grew 3.2% in the quarter, compared to a previous decline.

The Chinese and U.S. markets were the major drivers behind the growth.

Royal Mail Plc gained 3.3% to 435 pence after the oldest postal service in the U.K. said parcel deliveries exceeded expectations in the nine months of the fiscal year, while letter volumes received a boost by the closure of U.K. rivals.

Revenues increased 1% from the previous year, mainly due to 11% growth in European package deliveries. Letter volumes, excluding the mail related to the U.K. election, fell 3%.

Royal Mail benefited from the end of deliveries at rival Whistl, the U.K. unit of PostNL NV.

SABMiller Plc edged up 0.2% to 4,131 pence after the second-largest brewer in the world posted a higher-than-expected increase in third-quarter ended December 31.

Excluding currency effects, revenues rose 7% in the quarter, mainly due to gains in Africa and South America. European growth was also strong because the unusually warm weather boosted consumption.

Net revenues declined 8% for the quarter due to currency exchange volatility.

Volumes increased 4% in the quarter, with lager growing 3% and soft drinks up 8%.

The company is in the process of being acquired by Anheuser-Busch InBev in 2016.