Market Report: Mario Draghi to the rescue as ECB pledge beats markets gloom

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Has Super Mario come to the rescue once again with his big bazooka?

The vivid imagery of such a description painted by speculators and investors worldwide would suggest they have more creativity than others credit.

But Mario Draghi’s nickname appeared to be apt on Monday as markets across the world started to react with a sense of excitement at the promises of his European Central Bank to make money flow just that little bit easier.

Last Thursday, Draghi said interest rates would stay low for a while longer. He also cut negative interest rates to pay the eurozone lenders to increase credit to households and businesses. 

It initially spooked the markets but now sentiment in equities has improved. The FTSE 100 followed its European market cousins, rising 22.3 points, or 0.36%, to 6162.09, as investors await official musings from the Bank of Japan tomorrow and both the Federal Reserve and Bank of England on Thursday.

The doom and gloom around the upcoming Budget on Wednesday also failed to damp spirits, and the usual mining big-hitters led the charge upwards.

Glencore rose 6.25p, or 4.4%, to 147.9p; Anglo American was up 17.6p, or 3.4%, to 533.4p; GKN rose 6.3p, or 2.25%, to 285.75p and BHP Billiton climbed 18.3p, or 2.24%, to 833.75p.

At the bottom end, insurer Admiral was dropped 41p, or 2.14%, to 1874p on the back of downgrades from HSBC and Bank of America Merrill Lynch.

The latter wrote: “We look at Admiral’s valuation in a number of different ways — relative to peers, relative to history, analysing the various different earnings streams — and all of them suggest to us the stock is overvalued.”

Rivals Aviva, Prudential and Provident Financial all dropped seemingly on the back of the downgrade.

In other company news, United Arab Emirates-based — but London-listed — firm NMC Health, which provides private healthcare across the region, saw full-year revenues jump 36.8% to $880.9 million (£613 million) with net profits up 10.6% to $85.8 million.

Bosses attributed this to rapid expansion and allayed fears that the low oil price, on which much of the UAE economy depends on, might hit business. Shares rose 47p, or 5.17%, to 956p.

Petrol forecourt retail business Applegreen, primarily based in Ireland but expanding in the UK, watched sales hit €1.08 billion (£836 million), up 15%, with pretax profits down 6.8% to €14.9 million. 

However, the fall was mainly due to flotation costs from joining the FTSE last year and shares rose 10.75p, or 3.1%, to 361.75p.

Finally, booze emporium Majestic Wine, which recently changed its FTSE ticker from MJW to WINE, saw brokers Liberum place 4.8 million shares at 400p late on Friday, with the placing being heavily oversubscribed. Shares rose 7.7p, or 2%, to 389.47p.

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March 15, 2016 |
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