European Stocks Edge Higher on ECB Stimulus Hopes

Euro stocks

European stocks advanced on Friday in a choppy day of trade, as investors remained hopeful that the European Central Bank (ECB) would expand its stimulus program next month to kick start the struggling economy.

ECB President Mario Draghi said on Friday that the bank was ready to expand its monetary policy program at the next Governing Council meeting scheduled for December 3.

“If we decide that the current trajectory of our policy is not sufficient to achieve our objective, we will do what we must to raise inflation as quickly as possible,” Draghi told a conference in Frankfurt, referring specifically to next month’s meeting.

The Eurozone growth engine slowed in the third quarter, while inflation continued hover around the zero mark in October, official data has revealed.

After a choppy session, European stocks traded higher on ECB stimulus hopes. The pan-European STOXX 600 Index edged up 0.2%. The benchmark averages in London and Frankfurt also moved higher.

Stimulus hopes also weighed on the euro on Friday, as the common currency fell to a session low of 1.0664 US. The EUR/USD exchange rate settled at 1.0700 in the early North American session, declining 0.3%. The pair is likely to face immediate support at 1.0630. On the upside, initial resistance is likely found at 1.0710.

The US dollar strengthened across the board, gaining 0.2% against a basket of competitor currencies. It was the dollar’s fifth advance in the past six sessions.

Stock markets in Asia finished mostly higher on Friday. Hong Kong’s Hang Seng Index added more than 250 points or 1.1%, virtually erasing last week’s sharp decline. The Shanghai Composite Index also advanced 0.4%.

In Tokyo, the Nikkei 225 Index advanced for a fourth consecutive day, closing up 0.1%. With Friday’s gains, the benchmark gauge is trading at its highest level since August.

American stock futures also traded higher at the end of the week, as investors continued to price in a December rate hike from the Federal Reserve. Wall Street was relatively unchanged on Thursday after powering to gains in the previous session.

In commodities, gold prices recovered for a second consecutive day, but remained near five-year lows. Gold for December delivery was up $3.30 at $1,081.20 per troy ounce on the Comex division of the New York Mercantile Exchange.

Oil prices continued to trade mixed, with US crude touching below $40 a barrel for the third consecutive day. The West Texas Intermediate (WTI) benchmark settled down 51 cents or 1.3% at $40.03 a barrel. Global benchmark Brent crude settled up 6 cents or 0.1% at $44.24 a barrel.