European shares hit near 6-year high as ECB hints at June action

jueves 8 de mayo de 2014 12:44 GYT

* FTSEurofirst 300 up 1.1 pct, hits highest since June 2008

* Peripheral banks rally as ECB opens door to June move

* Metro and ProSieben rise after updates

By Francesco Canepa

LONDON, May 8 (Reuters) - A major European equity index surged to near six-year highs on Thursday, led by Italian and Spanish banks, after the European Central Bank opened the door to more stimulus measures in June.

The pan-European FTSEurofirst 300 index hit its highest level since June 2008 on speculation the ECB may cut interest rates next month, paving the way for further steps such as an asset-purchase programme.

Italian banks, which own large amounts of their government's debt, rallied 4.1 percent on the prospect of lower borrowing costs if the ECB cuts rates or starts buying sovereign or corporate bonds.

The ECB, which is trying to counter the risk of excessively low inflation, kept its key rate on hold on Thursday. But president Mario Draghi said it "was comfortable" with the idea of acting in June, after the bank's staff forecasts are published.

"These markets are rallying on the idea that ... he's ready to act. Having been quite silent, he has now shown his cards," Alan Higgins, chief investment officer at Coutts, said. "First a rate cut, which should be very modest, then some kind of QE. The fact that they're looking at it is enough to get the market very excited."   Continuación...