QE reassurance gives European shares a lift

TOKYO - Shares rose in Europe on Friday after the European Central Bank's governor Mario Draghi said its quantitative easing policy would continue for as long as needed. Markets also got a lift from a rebound on Wall Street, though weak data remained a drag on mainland Chinese shares.

Germany's DAX rose 0.5 percent to 11,614.11 and Britain's FTSE 100 gained 0.4 percent to 6,997.92. France's CAC 40 advanced 0.5 percent to 5,053.59. Wall Street looked set for a muted open, with both Dow and S&P futures up slightly.

Traders have been spooked by recent volatility in the bond market, but reassurances from the U.S. and European central banks appear to have somewhat assuaged those fears, analysts said. "ECB President Mario Draghi reinforced the belief the central bank will carry out the QE program in full," Stan Shamu, a market strategist at IG, said in a commentary. "Whether the impact these comments had, was just a flash in the pan remains to be seen but I feel traders will remain wary of bond stability in the near term. The risk of further selling will continue to linger among traders."

Speculation that the Hong Kong bourse may form a link with the Shenzhen Stock Exchange, just across the territory's border with mainland China, fueled a 5 percent jump in the price of HKEx Group, which operates the exchange.

Share prices sank on worries over the potential impact of a slew of share offerings on liquidity, combined with data showing stimulus has yet to staunch the slowdown of the world's second-largest economy. Data this week showed that fixed asset investment grew at the slowest pace in 15 years, in keeping with government policy aimed at shifting away from heavy reliance on such spending to drive growth, but worrying for investors who fear a too sharp slowdown.

Japan's Nikkei 225 gained 0.8 percent to 19,732.92 and Hong Kong's Hang Seng gained 2 percent to 27,822.28. Australia's S&P/ASX 200 rose 0.7 percent to 5,735.50. South Korea's Kospi fell 0.7 percent to 2,106.50 after the Bank of Korea kept its benchmark interest rate unchanged. The Shanghai Composite index dropped 1.6 percent to 4,308.69. Markets in Southeast Asia mostly rose.

Benchmark U.S. crude oil fell 32 cents to $59.56 a barrel in electronic trading on the New York Mercantile Exchange. It fell 62 cents to close at $59.88 a barrel on Thursday. Brent crude, a benchmark for international oil used by many U.S. refineries, rose 4 cents to $66.74 a barrel.

The dollar rose to 119.52 yen from 119.21 on Thursday. The euro slipped to $1.1359 from $1.1400.