German stock market benchmark – the Dax – hit a record high yesterday in a strong day for Eurozone markets.
The index of 30 major German companies closed at 12,167.72 – a 2.24 per cent gain. The European Central Bank (ECB) had purchased €9.571bn (£6.841bn) of debt in the first three days of its public sector debt buying plan (QE) that began last Monday, official figures showed yesterday.
“As the steroid injection of ECB QE continues to swell the Dax, as well as the other Eurozone indices, investors remain enthralled with the region and seem committed to continuing its upswing,” said financial analyst Connor Campbell from spread betting firm Spreadex. France’s Cac rose by 1.01 per cent, Italy’s FTSE MIB climbed 0.96 per cent and Spain’s Ibex closed 0.73 per cent higher.
Government borrowing costs have also been tumbling across most Eurozone countries. “Market reaction has been phenomenal,” Marchel Alexandrovich, economist at investment bank Jefferies, told City A.M. “Markets realise it’s a lot of paper [debt] the ECB has to buy and for the time being no one is quite sure who’s going to be selling and at what price.”