Europe midday: Equities push higher on hopes of more stimulus and upbeat data

European stocks rose as investors continued to take heart from European Central Bank president Mario Draghi’s dovish comments on Thursday, while an upbeat data release also underpinned sentiment.

At midday, the benchmark Stoxx Europe 600 index was up 1.4%, France’s CAC 40 was up 1.8% and Germany’s DAX was 2% higher.

Although Draghi stood pat on policy, he hinted that additional stimulus measures could be announced at the December meeting.

In the press conference after the rate announcement, the ECB chief said the governing council had discussed expanding its bond-buying programme and cutting the rate on reserves held at the central bank.

“Yesterday’s comments by ECB chief Draghi have certainly been a bit of a game changer. Not only were they much more dovish than expected, he also made it very clear that the ECB is ready to act in a decisive manner to boost growth and fight deflation if needed, possibly as early as December,” said Markus Huber, senior analyst at Peregrine & Black.

“This in return is not only boosting confidence in the Eurozone economy but also indirectly lowers the risk for investors in the months ahead.”

Despite the upbeat mood, some analysts were sceptical the upward momentum could be maintained.

“With the ECB willing to throw everything but the kitchen sink at the stuttering economy we are seeing a relief rally, but thoughts will soon move to the Fed policy meeting next week and we may still see a rate rise before the year is out,” said Mike McCudden, head of derivatives at Interactive Investor.

Some upbeat data also helped the tone as it showed the recovery in the Eurozone gained momentum in October, driven by higher demand for services.

The latest flash Markit Purchasing Managers’ Index survey showed its composite index rose to a two-month high of 54 in October compared with a reading of 53.6 in the previous month and analysts’ expectations for a 53.4 reading.

Earnings came thick and fast on Friday.

Electrolux rose after the home appliances maker posted a 9% increase in third-quarter net sales year-on-year.

Sweden’s Volvo was also in the black after it said third-quarter operating profit rose to 5.1bn Swedish crowns from 2.9bn in the same period last year.

Gucci owner Kering advanced as it posted a 12% rise in third-quarter revenue to €2.89b, while miner Boliden rallied after reporting an increase in third-quarter net profit.

On the downside, Ericsson slid after the Swedish telecom equipment maker’s third-quarter revenue missed analysts’ expectations, while shipping company Moller Maersk tumbled after cutting its full-year profit outlook.

In London, William Hill slumped after the bookie warned that full-year operating profit will come in at the bottom end of analysts’ forecasts as a result of additional taxes on the gambling industry and a tough comparison with last year.

TalkTalk was also under the cosh after saying a criminal investigation was launched by the Metropolitan Police cyber crime unit on Thursday following a “significant and sustained” cyberattack on the company’s website.