CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

ECB rate cut has mixed impact on Asian stocks

Article By: ,  Financial Analyst
June 6, 2014 3:15 PM

Asian stocks had a mixed reaction today (June 6th) on the back of yesterday's stimulus measures announced by the European Central Bank (ECB).

The ECB enforced a cut from 0.25 per cent to 0.15 per cent in its main interest rate after falling inflation pressurised the bank into action.

Further stimulus measures were also revealed by ECB leader Mario Draghi, who stated that the bank will continue to take action to boost the eurozone's economic recovery and more stimulus packages could be unveiled in the coming months. Meanwhile, the Bank of England's Monetary Policy Committee held interest rates at a UK record low rate of 0.5 per cent for another month.

Although Japan, Hong Kong and Australian stocks were all up at the start of the day following the ECB news, all of these markets erased their gains over the course of the session.

Index drops

The Nikkei ended 0.01 per cent down for the day to end the week on a slight low, while the Hang Seng index was 0.69 per cent lower when the index closed for the day.

As well as the reduction in main interest rates to 0.15 per cent, the ECB cut the deposit rate for banks to -0.1 per cent from zero per cent.

CMC Markets analyst Max Ho stated that the ECB's moves were "well-telegraphed". He told BBC News: "We witnessed history in the making. While this move to cut deposit rates to a negative is considered to be bold and unprecedented, some observers are not convinced that it will have a significant impact on existing bank lending."

The euro hit a four-month low yesterday after the ECB announced its stimulus measures, dropping by 0.3 per cent for the day to $1.3563. However, the FTSE Eurofirst 300 was up 0.6 per cent at 1,381.90.

Learn about the Asian markets and CFD trading at City Index

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024