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ECB hopes lift equities

Tuesday, December 02, 2014 - 01:53

It seems like not a day goes by without more gloomy economic data out of Europe. But rather than forcing stocks lower, equities shares are stronger, as investors pin their hopes on further easing measures from the European Central bank. Katie Gregory has the latest.

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The price of oil is plummeting and there's new disappointing data out of the euro zone. Factory prices fell at their sharpest monthly rate in a year. But shares continue to rise. It seems investors are banking on action from the European Central Bank. Stefen Scharfetter is a trader at Baader Bank. (SOUNDBITE) (German) TRADER AT BAADER BANK, STEFAN SCHARFETTER, SAYING: "Large amounts of money from the central banks is fuelling the stock markets. There are few alternatives to shares at the moment, I dare say no alternatives. So we see the DAX at over 10,000 and the Dow Jones near its previous high." Investors aren't expecting the ECB to announce additional easing measures at this week's meeting, but they do expect action next year, probably in March. That positive sentiment seems to be keeping equities high. France has long been calling for central bank intervention, it's struggling economy needs more help than most. Germany too is under pressure. Finance Minister Wolfgang Schaeuble met with his French counterpart Michel Sapin to discuss the issue. (SOUNDBITE) (German) GERMAN FINANCE MINISTER, WOLFGANG SCHAEUBLE, SAYING: "The situation we are in is not easy. But we are also at a point with the new European parliament and European Commission - where we can feel a renewed common will in Europe...to get ahead faster and more efficiently." (SOUNDBITE) (French) FRENCH FINANCE MINISTER, MICHEL SAPIN, SAYING: "Because it is a concern of the German authorities - France will do what is necessary to stick to our common regulations, while making an effort to make sure that the overly weak growth in our country, which is also too weak in Europe, can be stronger in the months to come." Germany doesn't hide it's distaste for the bond buying plan, France however is desperate for the cash injection. It's a delicate balancing act for the ECB...wait too long to introduce more stimulus and the economy may be too far gone to salvage.

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ECB hopes lift equities

Tuesday, December 02, 2014 - 01:53