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Banking sector and insurance companies gains benefits in the ECB’s announcement

Banking sector and insurance companies gains benefitsDisappointing data in the European shares rose on Thursday, March 10, as the European Central Bank President Mario Draghi announced to the public that the possibility of more rate cuts is unlikely to occur, thus, on the other hand, benefiting banks rising its shares on plans for new cheap funding. Data shows that the pan-European FTSEurofirst 300 index listed a 0.4 percent fell off by 1541 GMT. The said data had risen earlier by as much as 2.6 percent right after the ECB surprisingly announced rate cuts and expansion of its asset purchase programme.
A fund manager in Anthilia Capital, Giuseppe Sersale, commented on Draghi’s statement regarding the ECB’s more rate cuts is unlikely to occur. He said that this statement from Draghi’s had caught the attention of investors who are heavily selling the euro by surprise, thus, putting pressure on equities. As quoted in his statement, “Regardless of the short term, minute by minute market market reaction, we see the stimulus package as very important…especially the possibility given to banks to tap new long term funding at zero or negative rates”.
Among the European shares, the banking sector had projected the highest gains leading the numbers to a 1.4 percent rise. Among this sector, Spain’s Banco Popular rose 6.2 percent leading them on top of the board in the FTSEurofirst 300 index. In line with them are shares rising sharply from UniCredit, Intesa Sanpaolo and BNP Paribas – all coming from the same line of expertise.
Insurance companies are also climbing the ladder in the FTSEurofirst index as the British insurer, Aviva, rose 2.7 percent as a result of posting higher profits and dividends. Still in the same sector, Reinsurer Hannover Re was 4 percent higher after its total dividend and net profit surpassed the billion-euro mark for the first time.
Meanwhile, the fell down of the European shares was contributed by some factors including the weaker oil prices being weighed in the equity market sending the oil and gas stocks index down 1.3 percent. The multinational media conglomerate, Lagardere, also projected a 12 percent lower data on shares while fertilizer group K+S fell down 8.7 percent after a warning occurred regarding the possibility of experiencing a significant drop in its operating profit this year.

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