European stocks hit 14-year highs before ECB meeting

Stocks in Europe hit a 14-year peak on Wednesday ahead of the latest policy announcement from the European Central Bank.

The euro was lower against the dollar after the buck rebounded from Tuesday’s sell-off as investors expected the ECB to reaffirm its commitment to a government bond-buying programme, which has driven the single currency to multi-year lows versus the greenback.

Weak data from China that raises the prospects for more easing in the world’s second largest economy also lent support to stocks.

Growth in China’s economy slowed to a six-year low of seven per cent in the first quarter, fuelling expectations Beijing will loosen monetary policy to stimulate demand, just as the ECB has done to stave off deflation in the eurozone.

The European Eurofirst 300 index of leading shares climbed 0.8 per cent to reach its highest since late 2000, while bourses in France and Germany were also up.

The FTSE 100 index of leading shares was trading close to a record peak at 7,100 as mining shares were lifted off the back of rising metal prices.

Crude oil rallied, with WTI prices holding above the $54 handle as the growth in US inventories showed signs of slowing.