Global stocks rise as BoE eyes post-Brexit rates cut

Global stocks mostly rose Thursday as Britain's central bank hinted at fresh monetary stimulus to limit the impact of the country's vote to quit the EU.

Bourses in London, Paris and Frankfurt all rose after Bank of England chief Mark Carney said more stimulus would likely be needed to counter a Brexit-induced slowdown of the British economy. The news also pushed the pound lower against other currencies.

US stocks also advanced, picking up momentum throughout the session to close higher for the third straight day.

Analysts said Wall Street investors have increasing confidence the United States will not feel significant effects from Brexit, even as the resulting political uncertainty in Europe drags on growth in Britain and the European Union.

"It won't be the Brexit that will take the market down," said Charlie Bilello of Pension Partners.

London's benchmark FTSE 100 index closed 2.3 percent higher, Paris gains were 1.0 percent, while the rise in Frankfurt was more muted, at 0.7 percent.

In the US, the S&P 500 finished up 1.4 percent.

Carney, who had urged Britain to vote to stay in the EU, said "the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer."

However Carney cautioned that "there are limits to what the Bank of England can do."

British politics continued to lurch in unexpected directions with leading Brexit campaigner Boris Johnson ruling himself out of the Conservative Party race to succeed Prime Minister David Cameron in a shock announcement.

The International Monetary Fund fingered the Brexit as a major threat to growth.

"We see the uncertainty right now as probably the biggest risk to the global economy," said IMF spokesman Gerry Rice, calling on European leaders and other policymakers to take "decisive" actions to lower the threat.

In another troubling sign, Standard & Poor's cut the credit rating for the European Union by one notch, to AA, its third highest level.

The ratings agency warned the Brexit vote could weaken the political cohesion of the bloc, which will have 27 members after Britain leaves.

- Overdone worries? -

But some analysts said the market's strong bounce after the initial shock of the results of the June 23 referendum suggested the worries were exaggerated.

"We think that the markets are right to recognize that Brexit, and especially some form of Brexit-lite, would not be as damaging as so many were arguing ahead of the referendum," said Capital Economics economist Julian Jessop.

Asian stock markets also climbed.

Speculation that authorities will announce monetary easing measures to offset any negative impact have also provided strong support.

"The global central bankers are in the background and the markets realize that the central bankers are going to stand in front of any capitulation," Stephen Innes, a senior trader at Oanda Asia Pacific, said in a client note.

- Key figures around 2100 GMT -

New York - Dow: UP 1.3 percent at 17,929.99 (close)

New York - S&P 500: UP 1.4 percent to 2,098.86 (close)

New York - Nasdaq: UP 1.3 percent to 4,842.67 (close)

London - FTSE 100: UP 2.3 percent at 6,504.33 (close)

Frankfurt - DAX 30: UP 0.7 percent at 9,680.09 (close)

Paris - CAC 40: UP 1.0 percent at 4,237.48 (close)

Eurostoxx 50: UP 1.2 percent at 2,864.74 (close)

Tokyo - Nikkei 225: UP 0.1 percent at 15,575.92 (close)

Hong Kong - Hang Seng: UP 1.8 percent at 20,794.37 (close)

Shanghai - Composite: DOWN 0.1 percent at 2,929.61 (close)

Pound/dollar: DOWN at $1.3314 from $1.3455 Wednesday

Euro/dollar: DOWN at $1.1104 from $1.1124

Dollar/yen: UP at 103.23 yen from 102.80 yen

Source: AFP