European Markets Finished Higher On ECB Stimulus Hopes

(RTTNews) - The majority of the European markets are trading modestly higher on Monday, adding to the gains of the previous three sessions. Positive investor sentiment is being fueled by hopes for further quantitative easing measures from the European Central Bank. The ECB will hold its monetary policy meeting on Thursday and an announcement regarding government bond purchases is largely expected.

The Swiss stock market finished sharply higher Monday, as it attempts to bounce back from the sharp losses of the previous two trading sessions. The Swiss National Bank shocked the markets on Thursday, after it abandoned its currency "ceiling" of CHF 1.2 per euro.

Investors will also be watching for the result of the Greek elections on Sunday. Concerns over a potential Greek exit from the Eurozone have subsided, but investors are now worried that the Syriza party will roll back austerity measures if it proves victorious.

International Monetary Fund Managing Director Christine Lagarde cautioned that there would be consequences to Greece restructuring its debt after January 25 election.

"Collective approaches are always good at the European level," she told the Irish Times in an interview.

"As a principle, collection endeavours are welcome but at the same time a debt is a debt and it is a contract," Lagarde said. "Defaulting, restructuring, changing the terms has consequences on the signature and the confidence in the signature."

Energy stocks were under pressure at the start of the new trading week. JP Morgan announced a series of downgrades and the price of a barrel of oil dropped back below $48 per barrel.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.52 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.30 percent.

The DAX of Germany climbed by 0.73 percent and the CAC 40 of France rose by 0.35 percent. The FTSE 100 of the U.K. gained 0.54 percent and the SMI of Switzerland surged by 3.21 percent.

In Frankfurt, Deutsche Telekom rose by 1.03 percent. The telecom giant plans to increase spending on networks in its home market of Germany to ward off rivals including Vodafone Group Plc. and Spanish telecom group Telefónica S.A. Bloomberg reported.

Automaker Daimler climbed by 0.47 percent, on a report the company may extend the contract of the head of its China division Hubertus Troska.

Volkswagen gained 0.44 percent and BMW advanced by 0.67 percent.

Shares of Adidas also increased by 3.92 percent.

In Paris, Total decreased by 0.57 percent. JP Morgan downgraded the stock to "Neutral" from "Overweight." Technip also fell by 1.39 percent.

Societe Generale increased by 2.21 percent and BNP Paribas added 1.36 percent.

In London, Royal Dutch Shell dropped by 0.02 percent. JP Morgan downgraded its rating on the stock to "Neutral" from "Overweight."

BP fell by 1.08 percent, after JP Morgan downgraded the stock to "Underweight" from "Neutral."

However, BG Group rose by 0.30 percent. JP Morgan upgraded it to "Overweight."

Tesco climbed by 1.07 percent. Morgan Stanley upgraded the stock to "Overweight" from "Equalweight."

Travis Perkins increased by 3.81 percent. JP Morgan raised its rating to "Overweight" from "Neutral."

Julius Baer surged by 5.91 percent in Zurich. The Swiss investment group said it didn't suffer any losses following the SNB's decision abandoning its euro cap on the franc.

Italian bank Banco Popolare soared by 8.33 percent in Milan, on the buzz the government plans to abolish rules on cooperative banks.

Telefonica SA shares gained 2.34 percent in Madrid. Hutchison Whampoa, controlled by Hong Kong billionaire Li Ka-shing, is in early discussions with Telefonica to buy its O2, the Sunday Times reported, citing unnamed sources. Eurozone construction output fell slightly in November, after rising in the previous month, figures from Eurostat showed Monday. Production in construction dropped 0.1 percent monthly in November, in contrast to a 1.1 percent increase in October, which was revised from 1.3 percent. In September, output dropped 1.1 percent.

Eurozone's current account surplus for November declined from a year ago, figures from the European Central Bank showed Monday. The current account surplus decreased to EUR 18.1 billion from EUR 19.5 billion in the same month last year. In October, the surplus was EUR 19.5 billion.

Property prices in the U.K. recovered in January, after declining in the previous two months, as the recent stamp duty changes made homes cheaper for some first time buyers, figures from property-tracking website Rightmove showed Monday.

The average asking price for a house in the United Kingdom rose 1.4 percent from the previous month. The average price climbed to GBP 273,275 from GBP 269,477.

That follows the revised 2.2 percent contraction in December, lesser than the 3.3 percent decline estimated earlier. In November, prices had dropped 1.9 percent.

The U.S. equity markets are closed today for the Martin Luther King Jr. holiday. Investors will be watching for a batch of U.S. housing data later this week. The housing market index for January is due on Tuesday and housing starts for December are slated for Wednesday. Finally, existing home sales for December are scheduled for Friday.