14.08.201423:41:31UTC+00European shares rise on Putin comment, GDP data

European shares rebounded from loss on an earlier trade on the announcement of Putin that indicated an ease in tensions on Ukraine and the stalling of GDP data boost speculations that the central bank will employ more stimulus to aid the recovering economy.

The pan-European Euro Stoxx 600 index is inched up with a 0.3% gain to 331.04 in the closing trade with an intraday low of as much as 0.4%. The gauge has already lost a total of 1.5% for the month due the ongoing turmoil in Ukraine, Gaza, and the Middle East. The pan-European FTSEurofirst 300 decreased by 0.3% to 1,322.16 in the earlier trade. UK’s FTSE 100 is up by 0.43% or 28.58 points to 6,685.26. Germany’s DAX Index and France’s CAC 40 Index are both up by 0.28% or 26.22 points 9,225.10 and 0.25% or 10.64 points to 4,205.43 respectively. Meanwhile, Spain’s IBEX 35 Index is down by 0.09% and 9.20% respectively. Initially, the european indexes were down as an onslaught of GDP reports show a stalling in the economic economy with a surprise contraction in Germany and an almost no-growth data for France. The markets, turned however, after the morning speech of Russian President Vladimir Putin where he said that all efforts are being directed to ending the conflict as soon as possible “so that the blood can stop flowing in Ukraine.” Further stimulus came for the eurozone as speculations that the central bank will spur into action to prevent further slowdown in the economy.

Germany’s Thyssenkrupp inched up following reports that it was more likely to return to net profit in 2014 that would be the first time in three years. Royal Boskalis westminster also rose with an 8.2% surge after it announced a share buyback plan. Meanwhile, energy giant, RWE, decreased by 2.1% with a 62% decline in its first-half profit loss. Enzyme supplier, Novozyme also dropped, losing 6.5% after a worse-than-expected quarterly revenue report.

Chief market analyst at CMC Markets Plc, Michael Hewson, commented to Bloomberg that there is a impression proliferating in the market now that the low-growth shown by the GDP data might spur the European Central Bank to amend it by doing some kind of measure. Hewson adds that whether this impression is true is unclear but the belief that further stimulus is coming gave a positive bias to the equity markets in Europe.

Last June, the ECB carried out measure to prevent inflation like cutting deposit rates and lowering the main refinancing rate. The next meeting of the ECB is due September 4.