Europe open: Shares higher on ECB asset purchase stance
European shares were up slightly at the open on Friday as investors took heart from the European Central Bank's decision to increase the pace of asset purchases.
The pan-European Stoxx 600 index was up 0.2% in early trade after a rise in Asian shares overnight.
“Investors shrugged off a higher than expected (US) inflation print having taken a good look underneath the bonnet,” said Interactive Investor analyst Richard Hunter.
“The 5% figure was higher than the 4.7% which had been widely expected, but major drivers of the increase were airline fares and the sale of used cars, the latter of which was partly prompted by the semiconductor shortage currently affecting the industry.”
He added that a further easing of lockdown restrictions could lead to more pressure on prices, but this was likely to subside in the second half of the year and investors were “beginning to warm to the Federal Reserve’s narrative of the current elevated levels being transitory”.
Investors also took heart from the European Central Bank, which said that its emergency asset purchases would continue at a "significantly higher" pace over the third quarter than in the first months of 2021, just as expected.
Britain’s FTSE 100 index was up after official data showed the UK economy grew in April at its fastest monthly pace since July 2020 as lockdown restrictions eased.
The economy expanded by 2.3% following 2.1% growth in March and versus expectations for 2.5% growth.
On the year, GDP was up 27.6%. Nevertheless, the UK economy is still 3.7% smaller than it was in February 2020, before the pandemic and related restrictions kicked in.
In equity news shares in French reinsurer Scor jumped 5.6% as major shareholder Covea agreed to an orderly exit from the company after a settlement over a frustrated takeover attempt.