London - European shares rose on Friday as dovish comments by European Central Bank chief Mario Draghi reignited speculation the ECB will inject more monetary stimulus into the euro zone economy.
Speaking at a congress in Frankfurt, Draghi highlighted weak economic activity indicators from the bloc earlier this week and said the ECB would broaden the size, pace and composition of its asset purchase programme if needed.
“Draghi recognised that acting in a speedy fashion is necessary to avoid a deterioration in the inflation rate,” said Vincenzo Longo, a strategist at IG.
“The market extended gains as it started discounting quantitative easing on sovereign bonds from December.”
The pan-European FTSEurofirst 300 index was up 0.8 percent at 1367.73 points at 0910 GMT, while the Euro STOXX 50 index was up 1.1 percent at 3135.13 points.
Euro zone banks, which have a high exposure to the region's economy and significant holdings of sovereign debt, rose 1.3 percent.
Speculation about more stimulus from the ECB, pinned on comments by Draghi earlier this week, has boosted Germany's DAX , France's CAC and Euro STOXX 50 this week, setting up the three indexes for their first weekly gain this month.
They are up between 1.8 percent and 3.7 percent so far this week.
The Euro STOXX 50 has been stuck in a range between 3,025 points and 3,145 points this month but charts showed momentum was building after the index bounced off its 20-day moving average on Thursday.
“From a technical point of view, there is a high probability of an upward breakout of the significant hurdle at 3,145,” said Nicolas Suiffet, an analyst at Trading Central in Paris, who said the index's target is high as its June top at 3,325 points.
Among single stocks, French conglomerate Bouygues rose 3.9 percent after the chief executive of Altice said it is open to buying smaller rival Bouygues Telecom. Bouygues lost out to Altice's Numericable in the bidding to acquire SFR from Vivendi earlier this year.
Reuters