Europe midday: Stocks bound ahead after ECB stokes 'animal spirits'
Stock are bounding higher across the Continent after European Central Bank chief Mario Draghi said policmakers were not resigned to simply accepting low inflation.
"Central banks, it seems, like to move in groups. The shift from the antipodean central banks came first, and the ECB moving in the direction of more easing may be followed up tomorrow by a more dovish Fed too," said IG's Chris Beauchamp.
"Trump has managed to get everyone talking about cutting rates. The reaction has echoed that of old, with European indices performing a handbrake turn, recovering from their early losses to sit firmly in positive territory."
Speaking at the annual ECB Forum in Sintra, Portugal, Draghi said that further interest rate cuts remain a part of the ECB tool kit, that the monetary authority remained committed to its price-stability objective and that "considerable" room remained to expand quantitative easing in the euro area.
His remarks pushed the main stock market gauges out of their early rut and stoked a rally in euro area government bond markets.
As of 1210 BST, the benchmark Stoxx 600 was up by 0.97% to 382.12, alongside a gain of 1.21% to 12,231.38 for the German Dax while the FTSE Mibtel was advancing 1.32% to 20,899.07.
In parallel, the yield on the benchmark 10-year Italian government Treasury note was down by 14 basis points to 2.16%.
Yet sentiment in equity markets was arguably still very bearish, as reflected in part as in lenders' shares, with the corresponding Stoxx 600 sector gauge down by 0.08% to 131.18. .
According to the result of Bank of America-Merrill Lynch's June global fund manager survey, sentiment was at its most 'bearish' since the last financial crisis with "pessimism driven by concerns over trade war/recession, monetary policy impotence, and low strike prices for policy puts."
Also dampening the mood was news that Washington would deploy a further 1,000 troops to the Middle East.
In other economic news, the ZEW institute's economic confidence index for Germany slumped by a "sharp" 19.0 points from the month before to reach -21.1 points in June.
"The intensification of the conflict between the USA and China, the increased risk of a military conflict in the Middle East and the higher probability of a no deal Brexit are all casting a shade on the global economic outlook.
"On top of this, German industry has been reporting worse than expected figures for production, exports and retail sales for April," comments ZEW President Professor Achim Wambach.
Elsewhere, the European Automobile Manufacturers' Association reported that car sales in the European Union edged higher by just 0.04% against their year ago level in May to reach 1.44m vehicles.
For later in the session, the US Commerce Department was set to publish housing starts figures for May at 1330 BST.
German chip maker Siltronic was among the worst performers after warning of the impact that US restructions on Chinese exports would have.
Infineon was also lower, although off its worst levels of the session, after going cap in hand to investors for €1.5bn to help fund its acquistion of US rival Cypress Semiconductor.
Swedbank was down after announcing that it had fired two executives at its Estonian unit.