ECB stimulus lifts stocks as euro rallies after initial stumble

Sep 13, 2019: European stock markets rose on Thursday after the ECB unveiled a massive stimulus program and cut interest rates to goose a sluggish eurozone economy.

The euro was volatile, dropping against the dollar in an initial reaction before recovering in late business.

Elsewhere, US stocks pushed higher as trade tensions between the US and China continued to cool and as investors anticipated another interest rate cut next week from the US Federal Reserve.

"We're swinging back into normal territory with the focus back on trade and monetary policy," said Art Hogan, chief market strategist at National Securities.

In Frankfurt, the ECB took a key interest rate further into negative territory in its first rate cut since 2016 and announced it would resume stimulus via asset purchases at the rate of 20 billion euros per month and cheap loans to banks.

While the quantitative easing stimulus amount may have been lower than some analysts expected, the tone of the ECB was more dovish.

"This commitment to more QE is open-ended: it will end shortly before the Bank begins raising interest rates," said Andrew Kenningham, chief European economist at Capital Economics.

Meanwhile, the ECB said it would not raise interest rates until it saw inflation moving up towards its goal of just under 2.0 percent over the medium term.

AFP/APP