By Dave Morris
European markets shot higher as European Central Bank President Mario Draghi promised stimulus if economic conditions didn’t improve.
How did markets perform?
The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.51% leapt 0.7% to 381.3 after falling 0.1% Monday.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.06% was up 0.5% at 7,395.5. On Monday it dipped 0.2%.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1616% fell by 0.2% to $1.2525, after declining Monday by 0.4%.
In Germany, the DAX /zigman2/quotes/210597999/delayed DX:DAX +0.65% popped 0.8% to 12,183.1, following Monday’s close down 0.1%.
France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.30% climbed 1% to 5,445.1, adding to its increase of 0.4% Monday.
Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 +0.73% surged 1% to 20,834.5, up 0.1% from Monday’s close.
Following a dovish speech by ECB President Draghi, the euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0882% dropped 0.3% against the U.S. dollar, falling to $1.1187.
What’s moving the markets?
Markets reacted to a speech in Portugal by ECB President Draghi, who said that if the region’s economy slows and the Bank’s inflation target is threatened, “additional stimulus will be required”. He cited the threat of protectionism as one of the key factors weighing on exports, particularly manufacturing, and said that the bank’s asset purchase program “still has considerable headroom”.
U.S. President Donald Trump is deploying 1,000 additional U.S. troops to the Middle East amid tensions with Iran. The order follows an incident around alleged attacks on oil tankers near the Strait of Hormuz, which U.S. officials have attributed to Iran. Although investors typically bid up the oil price at times of conflict in the region, oil reacted only minimally on Tuesday.
In the U.K., Conservative Party MPs are preparing to hold its second ballot Tuesday to choose a replacement for Prime Minister Theresa May. Boris Johnson remains the front-runner, which was cited as the reason the pound slumped against the U.S. dollar.
Which stocks are active?
Ashtead Group PLC /zigman2/quotes/200232063/delayed UK:AHT +0.81% shares climbed 2.8% after the industrial equipment rental firm reported strong fourth quarter fiscal 2019 earnings. Pretax profit was £208.6 million, up from £174.7 million in the fourth quarter of fiscal 2018. The company attributed the rise to organic growth in rentals, and predicted continuing strength in North American markets.
Siltronic AG /zigman2/quotes/205449111/delayed DE:WAF -2.03% cut its outlook for 2019, anticipating lower sales by a figure of between 10% and 15%. The German silicon wafer company cited the tariffs battle between the U.S. and China as a factor, which has hurt semiconductor companies elsewhere in Europe. Siltronic shares plunged 12.8%, as did other companies in the sector such as AMS AG /zigman2/quotes/205647546/delayed CH:AMS +2.09% , which was down 4.6%, and STMicroelectronics NV /zigman2/quotes/203551318/delayed IT:STM +0.24% , which sank 2.4%.