ECB's bond-buy plan lifts shares

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By Richard Hubbard

London - Stock markets worldwide gained on Friday, and yields on peripheral euro zone government debt fell as investors welcomed the European Central Bank's latest bond-buying plan and positioned for a potentially strong US jobs report.

Expectations of a big rise in US nonfarm payroll numbers, due out at 1230 GMT, have grown since data on private-sector employment on Thursday showed robust growth for last month.

But the markets' main driver is still the ECB's new and potentially unlimited bond buying plan, which it is hoped will lower the borrowing costs for indebted nations like Spain and Italy and ease fears over the future of the euro.

The broad FTSEurofirst 300 index of top European companies, which jumped 2.6 percent on Thursday when the ECB announced the plan, has gained a more modest 0.3 percent to 1,107.73 points in early trade.

“I am positive on the market in the near term. You have got the policy response coming through, valuations are still OK, and the macroeconomic backdrop isn't all that bad. These three things add to the momentum in the market,” said Graham Bishop, equity strategist at Exane BNP Paribas.

Reaction to the ECB programme had earlier sent US stocks to multi-year highs, with the widely watched S&P 500 index back to its levels of May 2008 when the financial crisis was still gathering pace.

US stock index futures are pointing to further gains when Wall Street opens later.

Asian shares outside Japan posted their biggest daily gain in six weeks on Friday. They had gained an extra boost from a jump in Chinese stocks after authorities approved 60 new infrastructure projects this week in a bid to bolster growth.

All the equity rallies have lifted the MSCI's world equity index nearly 2.5 percent over the past 24 hours, back to levels last seen in early May, when demand was still being supported by the ECB's last big policy move - an injection of cheap three-year funds into the banking system. - Reuters


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