European shares hit a five-month high on Friday as one the biggest weekly drops in the euro this year buoyed investor sentiment. As Kate King reports it was partly thanks to the dovish tone struck by the ECB and Q3 earnings.
Currency looks to have been the biggest mover on Friday following the dovish tone struck by the ECB a day earlier. The euro dropping more than 1 percent against the dollar its biggest one day loss in more than a year. While European shares hit a five-month high. (SOUNDBITE) English CHARLES STANLEY, CHIEF INVESTMENT COMMENTATOR, GARRY WHITE, SAYING: "The market reaction has actually being very positive in equity and bond markets precisely because he's left his options open. Economic cycles and stock market rallies tend to come to an end when central banks overstep, none of the central banks around the world want to bring this market to a halt - they don't want that on their term sheet really." Stock gains were also underpinned by strong Q3 earnings Many eurozone firms have beaten estimates including Volkswagen, the world's largest automaker. It's lifted its profit target for the year after cost cuts at its core autos division saw earning before interest jump 15 percent to 4.3b euros. (SOUNDBITE) English CHARLES STANLEY, CHIEF INVESTMENT COMMENTATOR, GARRY WHITE, SAYING: "It's SUV vehicles which it has heavily invested and hasproved a tremendous success andd this is what is essentially saved it from the cost associated with the emissions scandal. It is also very good that VW is a well guarded company, the emissions scandal aside its products are very high quality and that is really what has saved the company. So thank God for SUV's. " And there was more good news about the regions' other big concern - inflation. An ECB survey showing forecasters think it could rise to 1.9 percent by 2022 - above earlier projections. Data Mario Draghi likely factored in before he curbed stimulus.