European shares rise sharply

Europe’s main stock markets closed sharply higher on Thursday, with Germany’s main index at a record, as traders welcomed strong US jobs data and digested another surprise from ECB. Frankfurt's DAX 30 gained 1.19 percent to close at 10,029.43 points, just beating its previous record close last month. London’s FTSE 100 index of top companies ended up 0.72 percent at 6,865.21 while the CAC 40 in Paris rose more than 1.0 percent to 4,489.88 points compared to Wednesday's closing levels. The euro dropped to $1.3607 from $1.3659 late on Wednesday in New York, while the pound eased back from a six-year high against the dollar. In Frankfurt, the ECB kept its main interest rate unchanged at 0.15 per cent, and said that from January 2015 it would hold rate-setting meetings every six weeks instead of once a month. The ECB will also start publishing ‘regular accounts’ from the same date, central bank president Mario Draghi told a news conference. Meanwhile, the US labour market gave a boost to growth prospects for (the second half of the year) as payrolls and the unemployment rate both portrayed a picture of a fast-improving economy, Alpari analyst Joshua Mahony said. ‘In the absence of shocking monetary policy decisions, the ECB presented another surprise,’ ING economist Carsten Brzeski noted. The decision was taken to reduce market pressure on the ECB for action every time its governing council meets. Vodafone shares rose more than one percent after Brussels gave it the green light for its acquisition of Spanish telecommunications operator ONO. Shares in Balfour Beatty shares lost 4.5 percent after the infrastructure group reported a further deterioration in its British construction business.
- Dollar gains -
The strong US jobs data also pushed the dollar higher against the pound, which hit a six-year high against the greenback this week on expectations London could raise rates soon. In foreign exchange trading in London on Thursday, the British pound eased to $1.7144 from $1.7165 late in New York on Wednesday. That's down from the near six-year high of $1.7177 it hit Wednesday. ‘No one is expecting the Fed's interest rate policy to shift until well into next year,’ said Bill Kemp, head of dealing at FEXCO. ‘By contrast a rate rise is very much on the table at the Bank of England... don't expect the pound's bull run against the dollar to ease substantially any time soon.’ The euro firmed to 79.36 British pence on Thursday, from 79.57 pence the day before, according to AFP.