European shares hit a 14-year high and the euro fell on Wednesday after the European Central Bank affirmed its loose policy stance and as weak data from China raised prospects of monetary easing there too.
A German auction saw 10-year borrowing costs for the euro zone’s biggest economy reach a new record low.
Firmer commodity prices and merger news also helped hoist European stocks, and US stock index futures pointed to a firmer start on Wall Street, bucking a softer trend in Asia.
Financial markets remain broadly driven by policy actions of the world’s major central banks and Tuesday’s softer US retail sales supported the view that the Federal Reserve will not rush to raise interest rates in June. The ECB kept rates unchanged at record lows at its meeting earlier in the day, and is also tipped to quash talk it might scale down sooner than planned the 1 trillion euro quantitative easing scheme it launched last month.
The pan-European Eurofirst 300 index of leading shares rose 0.8 percent to 1,653.62 points, its highest since late 2000. News that Finnish telecom equipment maker Nokia has agreed to buy France’s Alcatel-Lucent helped the push higher.
The euro was down 0.7 percent at $1.058 and was 0.5 percent lower against the yen at 126.53 yen. The common currency struck a one-month low against the dollar of $1.05205 on Monday.
German 10-year borrowing costs, the benchmark for eurozone debt, fell close to zero as a Bund auction showed there were enough private investors willing to compete with the ECB for the top-rated, almost yield-free paper.
