Stocks in Europe, Asia rise after ECB hints at more stimulus

HONG KONG – World stock markets rallied further on Friday after the European Central Bank signaled that it’s considering more stimulus to revive Europe’s ailing economy.

KEEPING SCORE: European stocks rallied for a second day on the ECB news. France’s CAC 40 rose 1.9 percent to 4,893.46 and Germany’s DAX gained 2.1 percent to 10,709.06. Britain’s FTSE 100 climbed 1.2 percent to 6,449.53. U.S. stocks were poised for a more subdued open, with Dow futures up 0.5 percent and the broader S&P 500 futures up 0.4 percent.

STIMULUS HOPE: Major world markets are being lifted by news that the ECB is mulling the idea of expanding its stimulus program in December. ECB chief Mario Draghi hinted Thursday that the bank might extend its 1.1 trillion euro ($1.2 trillion) bond purchase program or take other measures, such as cutting a key interest rate. Investor attention now turns to the world’s other big central banks, the Fed and the Bank of Japan, which are holding policy meetings next week at which officials will undoubtedly factor the ECB’s intentions into their own outlooks.

QUOTE-WORTHY: “The ECB looks to be replacing the Fed as investors’ best friend,” said Shane Oliver, head of investment strategy at AMP Capital in Sydney. “The ECB’s strong easing bias is very supportive of eurozone shares, but because it puts downwards pressure on the value of the euro it adds to pressure on the Bank of Japan to consider further easing and on the Fed to further delay rate hikes.”

EUROZONE GROWTH: Markets were further buoyed by a survey showing economic activity in the eurozone picked up some pace in October. A gauge of business activity by financial data company Markit rose to 54 points from 53.6 the month before, suggesting Europe is not feeling the impact of the Chinese slowdown yet. Economists say the survey indicates economic growth continued at a modest pace in the fourth quarter, but perhaps not enough to keep the ECB from considering more stimulus.

ASIAN SCORECARD: Regional indexes rose strongly with Japan’s Nikkei 225 jumping 2.1 percent to close at 18,825.30. South Korea’s Kospi gained 0.9 percent to 2,040.40. Hong Kong’s Hang Seng added 1.3 percent to 23,151.94 and the Shanghai Composite Index in mainland China rose 1.3 percent to 3,412.43. Australia’s S&P/ASX 200 climbed 1.7 percent to 5,351.60.

ENERGY: In oil futures trading, benchmark U.S. crude rose 13 cents to $45.51 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 18 cents to settle at $45.38 a barrel on Thursday.

CURRENCIES: The dollar slipped to 120.44 yen from 120.86 yen in the previous day’s trading. The euro rose to $1.1117 from $1.1081. It had fallen sharply on Thursday after the ECB signaled more stimulus, which tends to weigh on a currency.