ECB stimulus signal sends markets higher

Europe's main stock markets rose Wednesday as the European Central Bank signalled it could begin purchasing government bonds next year, with sentiment also supported by upbeat US growth data.
The Frankfurt-based ECB will be able to gauge early next year whether it needs to start buying sovereign bonds to stimulate the eurozone economy, its deputy president Vitor Constancio said.
"During the first quarter of next year we will be able to gauge better ... (whether) we will have to consider buying other assets, including sovereign bonds in the secondary market," Constancio said in London.
ECB chief Mario Draghi had last week signalled readiness to act quickly to deter deflation, sparking stimulus hopes.
In midday deals, London's benchmark FTSE 100 index rose 0.24 percent to 6,747.21 points, as official data confirmed the British economy grew by a solid 0.7 percent in the third quarter.
Elsewhere, the Paris CAC 40 gained 0.04 percent to 4,384.21 and Frankfurt's DAX 30 added 0.66 percent to 9,925.42 points compared with Tuesday's closing value.
- ECB 'dips toe in water' -
"It looks like Draghi wants to stay above the fray and so is letting Constancio publicise further details -- i.e., possible sovereign debt purchases," ETX Capital trader Daniel Sugarman told AFP.
"Once again the ECB seems to be dipping its toe on the water to test the economic temperature -- on this occasion the market's response seems pretty positive."
In another boost on Wednesday, European Commission chief Jean-Claude Juncker unveiled a huge 315 billion euro investment plan to "kickstart" the stalling economy, saying it would show the world that Europe is back in business.
The eagerly awaited plan involves the EU setting up a 21 billion euro ($26 billion) fund with the aim of drawing in 15 times that amount in private investment.
Juncker hopes the proposal will boost desperately needed jobs and growth amid concerns that Europe's failure to recover from the financial crisis is dragging the world economy down with it.
"The European stimulus machine let out another murmur of intervention this morning," said analyst Connor Campbell at trading firm Spreadex.
"Constancio claimed that it wouldn’t be until the first quarter of 2015 that the ECB would be able to gauge whether the buying of sovereign bonds is necessary to jump-start the eurozone economy.
"This followed the announcement ... by Juncker of a European Fund for Strategic Investment, the first flagstone scheme of the Juncker presidency."
Asian equity markets were mostly higher Wednesday following better-than-expected US economic growth data and news that Germany had narrowly averted recession.
Tokyo stocks dipped 0.14 percent but Sydney rallied 1.15 percent, Hong Kong added 1.12 percent and Shanghai gained 1.43 percent.
The gains came despite a weak lead from Wall Street, where the Dow and S&P 500 retreated slightly from record highs.
The US Commerce Department said third-quarter growth came in at to 3.9 percent, up from a previous estimate of 3.5 percent and easily beating expectations for 3.2 percent expansion.
The figures are the latest showing the world's number one economy is on a healthy recovery track, in contrast to the eurozone and Japan.
In foreign exchange deals on Wednesday, investors shrugged off the ECB comments and Juncker plan.
The euro dipped to $1.2453 in late morning London deals. That compared with $1.2474 late in New York on Tuesday.
On the London Bullion Market, gold slid to $1,195.70 an ounce, compared with $1,199 late on Tuesday.
- Thomas Cook shares plummet -
In company news on Wednesday, Thomas Cook's share price tumbled by more than a fifth after the British travel group announced the exit of chief executive Harriet Green.
She left with immediate effect, saying her work at the once-troubled company was done, and was replaced by chief operating officer Peter Fankhauser.
Shares were also hit as Thomas Cook warned in a separate earnings statement that it expects growth this year to be at a more moderate pace because of the tougher trading environment.
In reaction, shares tumbled 20.59 percent to 109.50 pence on London's second-tier FTSE 250 index, which was down 0.22 percent at 15,796.07 points.