PARIS — Stocks rose for a second day in Europe and Asia on Thursday and the euro strengthened, as an auction of Spanish government debt met with firm demand and investors awaited the outcome of a policy meeting of the European Central Bank.
While the bank was expected to leave its benchmark interest rate unchanged at 1 percent, many investors were hoping for an announcement that officials are ready to increase their purchases of euro governments’ sovereign bonds to help ease pressure on borrowing costs.
Expectations of such support helped to power a strong rally in the European and U.S. markets Wednesday.
“I cannot recall in my experience a more important E.C.B. monetary policy meeting than the one taking place today and unfortunately with anticipation and hope so high ahead of the meeting there would appear to be plenty of scope for disappointment,” Derek Halpenny, a currency analyst at Bank of Tokyo-Mitsubishi UFJ in London, wrote in a research note.
“The E.C.B.,” he added, “stands alone as the most credible authoritative euro-zone–wide institution that is in a position to act independently and aggressively in an attempt to stem the euro-zone debt crisis from getting out of control.”
In Madrid, the Spanish government sold €2.5 billion, or $3.3 billion, of three-year bonds at an average yield of 3.7 percent. Though the yield was well above the 2.5 percent the state paid at a similar auction in October, the offering was oversubscribed by 2.27 percent, showing solid demand. A higher yield suggests investors are demanding a premium to compensate for a higher perceived risk.
In morning trading, the Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 1.1 percent, while the FTSE 100 index in London added 0.9 percent. The DAX in Frankfurt added 0.4 percent. The Ibex 35 index in Madrid rose 2.4 percent.
The euro rose to $1.3197 from $1.3139 late Wednesday in New York.
European bond prices were mixed. Benchmark issues from several countries that have recently been under selling pressure — including Spain and Belgium — rallied slightly, while 10-year bonds from heavyweights Germany and France weakened a bit.
Speaking in New Delhi , the managing director of the International Monetary Fund Dominique Strauss-Kahn suggested that central banks could do more to support growth.
“Growth is the most important thing,” he said, according to Reuters. “But because of a very high level of public debt, the burden falls on monetary policy.”
He was also upbeat about the ability of Europe to emerge from its debt crisis. The decision by fund and European countries to support Ireland “will fix the problems in the banking sector and the Irish economy will come back on track rather rapidly,” he said.
Trading in U.S. index futures suggested Wall Street stocks would open with modest gains. On Wednesday, the Dow Jones industrial average rose 2.3 percent, while the Standard & Poor’s 500 index rose 2.2 percent.
Separately, the European statistics agency Eurostat released data Thursday showing that gross domestic product in the 16-nation currency area grew 0.4 percent quarter-on-quarter in the July to September, after a 1 percent jump in the second quarter. The figure was a confirmation of an initial estimate last month.
Compared to a year earlier, the euro zone economy expanded by 1.9 percent in the third quarter, on a seasonally adjusted basis, after a 2 percent rise in the second quarter. The increase was driven by household consumption, government spending and exports.
Germany, Europe’s biggest economy, expanded 0.7 percent in the third quarter. Growth in Spain was unchanged on the second quarter while the Greek economy contracted 1.1 percent on the quarter; third quarter figures for Ireland were not available.
Industrial producer prices, which show inflationary pressure early in the pipeline, increased by 0.4 percent month-on-month in October for an annual gain of 4.4 percent, lifted mainly by energy and intermediate goods.
Asian shares rose across the board, as investors in the region caught up with overnight gains in New York. The Tokyo benchmark Nikkei 225 stock average rose 1.8 percent to its highest close since June. The main Sydney market index, the S&P/ASX 200, gained 0.9 percent. In Hong Kong, the Hang Seng index rose 0.9 percent, and in Shanghai the composite index rose 0.7 percent.
U.S. crude oil futures for January delivery rose 60 cents to $86.81 a barrel. Comex gold rose slightly to $1,390.85 an ounce.
The pound rose to $1.5638 from $1.5623. The dollar fell to 84.15 yen from 84.23 yen.
