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European stocks eke out fresh record as ECB raises recovery outlook

European stocks eke out fresh record as ECB raises recovery outlook

11 Jun 2021

European stocks inched to fresh peaks on Thursday as the European Central Bank raised its recovery outlook and promised to keep ample stimulus flowing, while travel stocks fell after a recent run of gains.

The pan-European STOXX 600 index was up just 0.1%, but at a fresh record high of 455.76 points, while the narrower index of eurozone stocks fell 0.1%.

ECB President Christine Lagarde said policymakers agreed to make further emergency purchases over the next quarter “at a significantly higher pace” than during the first months of the year” but gave no further detail about the expected levels.

The central bank now sees 2021 euro zone economic growth at 4.6%, above the 4% projected in March. Inflation projections were also raised, with the ECB expecting price growth at 1.9% this year, in line with its target and above its last projection for 1.2%.

“The ECB’s main mission today was to avoid any taper talk and not harm the still tentative economic recovery or allow bond yields to surge prematurely,” said Carsten Brzeski, global head of macro at ING.

“It accomplished its mission: the ECB seems to have bought some time without starting the taper talk.”

Interest rate-sensitive banking stocks rose 0.4%, while tech stocks rose 0.9%.

The meeting came as data from across the globe point to building inflationary pressures, particularly in commodities, as economies recover from long COVID-19 lockdowns.

The FTSE MIB climbed up by 0.09% to 25,661.71. In the cash markets, the DAX futures Germany was trading down 0.01%  to 15,566.17. CAC 40 futures in France rose by 0.31% to 6,568.60 while the FTSE 100 futures in the U.K. was up by 0.57% to 7,127.27 ,at the time of writing.