Europe: Stocks accelerate gains as Draghi rides to the rescue

[LONDON] For European stock investors seeking assurances of central-bank support after China-fueled volatility rocked global markets, Mario Draghi didn't disappoint.

Stocks that were already up before the ECB president's press conference in Frankfurt rose higher after he unveiled a revamp of his quantitative-easing program that allows officials to buy higher proportions of each euro-area member's debt. Officials cut forecasts for economic growth and inflation, citing the emerging-market rout as a threat.

"Mr Draghi is really trying to assure the market that the ECB is ready to act and we'll have QE for the next years," said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. "He is doing everything is needed to stabilize the market. QE is here to stay for quite a while."

The Stoxx Europe 600 Index climbed as much as 2.9 per cent, before closing 2.4 per cent higher. The gauge halted a rout yesterday, after posting the worst monthly performance in four years and tumbling further earlier this week amid concern over a slowdown in China.

A gauge of services and manufacturing in the euro area climbed to a four-year high in August, a Markit report showed. With Chinese exchanges closed for a holiday, investors also got a respite from market moves there.

All 19 Stoxx 600 groups climbed, with miners rallying the most. Glencore Plc and Anglo American Plc each gained at least 6 per cent.

UniCredit SpA advanced 3.4 per cent after people familiar with the matter said the bank is considering cutting at least 10,000 jobs.

EasyJet Plc and Air France-KLM Group led airline shares higher. The British discount carrier rallied 5.4 per cent after raising its annual profit forecast, while the French company jumped 7.2 per cent. A report said Air France is considering creating a low-cost, long-haul unit.

Syngenta AG advanced 3.5 per cent after saying it plans to buy back US$2 billion of shares and sell a business. Polyus Gold International Ltd climbed 3 per cent. Russia's largest gold producer may become the target of a buyout offer from its largest shareholder.

Abengoa SA's Class B shares slid 6.8 per cent. Bonds of the Spanish renewable energy company fell after reports that some banks won't underwrite its planned capital increase.

BLOOMBERG