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Category: Stockmarket / Currency / Markets / Futures / Money and Monetary Policy

Share market rally continues despite closed Wall St

Tuesday, 16 Feb 2016 05:54:16 | Thuy Ong

Tokyo's Nikkei had its strongest one-day rise since 2008 yesterday. (Toru Yamanaka : AFP)

European shares rallied to their biggest two-day gain in more than four years overnight, boosted by comments from the European Central Bank that it is ready to ease policy further in March if needed.

The ECB's president Mario Draghi said the bank will take measures to ensure monetary policy reaches the 'real economy', if that appears to be threatened by financial-market turbulence.

"First, we will examine the strength of the pass-through of low imported inflation to domestic wage and price formation and to inflation expectations," Mr Draghi said.

"Second, in the light of the recent financial turmoil, we will analyse the state of transmission of our monetary impulses by the financial system and in particular by banks.

"If either of these two factors entail downward risks to price stability, we will not hesitate to act."

In London, the FTSE 100 rallied 2 per cent to 5,824, the German DAX climbed 2.7 per cent to 9,207, while France's CAC 40 jumped 3 per cent to 4,115.

The gains in Europe also followed a 7.2 per cent surge for Tokyo's Nikkei - its best one-day gain since 2008.

Wall Street was closed for the President's Day public holiday. Locally, shares are set to follow European leads higher with the ASX SPI 200 adding 0.6 per cent, or 27 points, to 4,812.

Minutes from the Reserve Bank of Australia's most recent policy meeting will be released today.

Investors will also keep an eye on earnings reports from companies including Pacific Brands and blood products maker CSL, while National Australia Bank will post a trading update on its first quarter.

The Australian dollar was holding yesterday's gains at 71.4 US cents by 8:40am (AEDT).

It was also buying 81.9 Japanese yen, 49.4 British pence, 64 euro cents and $NZ1.072.

On commodities markets, spot gold had dipped to $US1,209 an ounce.

Brent crude was building on strong gains at the end of last week, rising to $US33.96 a barrel.

AustraliaPlus


 

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