European stocks advanced further on Thursday and were on track for three-month highs, as investors continued to price-in additional stimulus by the European Central Bank as early as next month.
The pan-European STOXX 600 Index climbed 0.9% in intraday trade after rallying 1.5% on Wednesday. The benchmark gauge was on track for its highest close since August 18.
Stocks were higher throughout Europe, with all of the major indices reporting gains. London’s FTSE 100 Index climbed 0.7%. The DAX Index in Frankfurt surged more than 160 points or 1.4%. The major averages in Paris and Madrid were also up more than 1%.
The latest rally in European stocks come amid growing signs the European Central Bank (ECB) is preparing to expand the size and scope of its monetary easing program, perhaps as early as next month. Growth in the Eurozone economy slowed to 0.3% in the third quarter from 0.4% in April-June. Meanwhile, inflation remains virtually non-existent.
Stimulus bets have weighed on the euro this week. The EUR/USD exchange rate plunged below 1.0600 on Wednesday before settling above that level. The pair was consolidating at 1.0617 on Thursday, virtually unchanged from the previous close.
Share prices in Asia ended mixed on Thursday. Japan’s Nikkei 225 Index rallied nearly 100 points or 0.5% to close at three-month highs.
In China, the CSI 300 Index and Shanghai Composite each declined. Hong Kong’s Hang Seng Index was virtually unchanged.
Meanwhile, American stock futures rose sharply on Thursday morning, as US markets remained closed for the Thanksgiving holiday.
In commodities, oil prices drifted lower after a back-and-forth session the previous day. The West Texas Intermediate (WTI) benchmark for US crude slipped 15 cents or 0.4% to $42.89 a barrel on the New York Mercantile Exchange. Brent crude, the international benchmark, fell 54 cents or 1.2% to $45.63 a barrel on ICE Futures Europe.
Oil prices spiked earlier in the week after Turkey shot down a Russian fighter jet for allegedly trespassing into Turkish airspace. Investors are concerned that Turkey’s actions could spark a bigger rift between Russia and NATO. The Syrian war has not only ravished the Arab Republic, it has created a deep divide between Western powers backing the rebels and Russia, which is backing the government of President Bashar al-Assad.
Based out of Toronto, Canada, Husni Sam Borji is senior macroeconomics analysts who contributes regularly to TradersDNA, where he examines the global financial markets. Husni Sam has authored dozens of government reports and industry whitepapers, as well as thousands of financial articles. Husni Sam holds a BA from the University of Windsor and a Master’s degree in Economic Public Policy from McMaster University.
His expertise includes macroeconomics, fundamental analysis, industry research and global political economy.