EU stock markets improve on stimulus hopes

Published:  20 Jun at 4 PM

EU stock markets went up on Tuesday afternoon, propped up by falling UK inflation, hopes of central bank stimulus packages and positive company outcomes.

The German Dax index went up 1.8 percent to 6363.4, while the French the Cac 40 index increased by 1.7 percent to 3117.9. Rising over 2 percent was the FTSE 100, which ended up by 1.7 percent at 5586.3. Meanwhile, the Spanish Ibex 35 index climbed by 2.7 percent to 6,693.9.

Traders predict that the US Federal Reserve will decide to put more cash into the economy after its meeting for policy-setting, which will last for two days, ending today.

With British inflation dropping to 2.8 percent, the Bank of England now has greater flexibility to stimulate the country’s economy, which is still fighting hard to find steady growth. At the same time, falling consumer sentiment in Germany increased speculation that central banks would get involved and boost confidence.

The stock markets saw a recovery despite the rise in Spain’s short-term borrowing costs as well as the growing uncertainty over the final structure of Greece’s government. The euro climbed 0.5 percent against the US dollar, reaching $1.264 on the currency markets.