European stock markets closed in green

On Tuesday session, stock markets in Europe were trading elevated, extending the  strong performance since the beginning of the week. Major stock indices closed higher, largely influenced by the sharp rise commodity and oil prices.

German DAX 30 index closed 0.65% higher, ending the day at 10 045.44, while FTSE 100 finished with a gain of 0.68% at 6 156.65. Best performers within DAX 30 index were Volkswagen AG, RWE AG and Deutsche Bank AG, as their shares rose respectively by 4.22 %, 2.46 % and 2.42 %. 

Technically speaking , the index failed to break resistance at 11400 and now gravitates within 9300-11400. Next resistance in the upward is a psychological level at 11700, where is not excluded a false breakout. Currently the bulls remain calm, but the uptrend is still in place. A possible downward correction would lead a price to the levels of support located respectively at 10000, 9300 and 8900.

Mario Draghi’s speech overwhelmed the markets

The euro erased its initial losses after European Central Bank (ECB) President Mario Draghi hinted that it is not expected a further reduction of key interest rates in the eurozone.

Surprisingly the massive new stimulus measures taken by the European Central Bank at today's meeting led for a short time to a drop in the euro to 5-week lows at 1.0822 dollars and 0.7652 pounds. The single currency managed to hit a weekly low at 1.0891 swiss franks and dropped to hourly day low at 123.65 Japanese yen.

But the following  comments by ECB governor Mario Draghi that he does not expect a further reduction in key interest rates led to a sharp rebound of the single currency to a two-week high of 1.1115 dollars. Meanwhile, the euro rose to a one week high of 0.7797 pounds to three-week high of 126.24 Japanese yen.

The initial euphoria of the European stock markets caused by today's decision of the ECB to undertake a series of aggressive stimulus measures is fading away. It looks like investors began to realize that today's fall in deposit interest rates of ECB to -0.4% is a "double-edged sword," especially with regard to commercial banks and their profits that form the largest part of the ongoing credit policies.

After an initial rise in the main European stock indices by between 2.5% and 3.0% at the end of trading today they wiped out a large part of their profits. Now the common European Stoxx Europe 600 index rose by a modest 0.83 percent, Germany's DAX rose 1.37%, while the French index CAC40 - by 1.49%. Passing the initial euphoria is due largely to the sharp appreciation of the euro, which is potentially negative for export-oriented companies in the eurozone.

European markets ended with strong gains after rising oil prices

European markets accelerated gains before the upcoming Christmas holidays and closed with strong gains as investors welcomed the recovery of oil prices and shares of mining companies.

The pan-European STOXX 600 finished 2.7 percent higherprovisionally, with all sectors closing sharply higher, helped by a positive trading session in the U.S.

Oil was in focus after U.S. crude prices rose above Brent on Wednesday, following an unexpectedly large drop in U.S. crude inventories.The Energy Information Administration reported crude inventories fell by 5.9 million barrels last week, which shocked markets as analysts had expected an increase of 1.1 million barrels. 

At the European market close, U.S. crude and Brent both traded at over $37 per barrel, up more than 3 percent on the day.

The European oil and gas stock index closed up around 4.8 percent as a result.

Shell and BG shares were also pushed higher by support from shareholder Aberdeen Asset Management for Shell's proposed $53 billion takeover of BG.

Shell released a statement saying the break-even price for the deal was somewhere in the low $60 range for Brent crude oil.

BG Group and Shell's shares both finished more than 5 percent higher on Wednesday.

Tullow Oil was one of the top performers on the STOXX 600, finishing over 10 percent up, with Seadrill and Statoil also posting strong gains, closing up 4.7 and 5.2 percent respectively.

Base metal prices ticked slightly higher on Wednesday, boosting mining stocks. Steel maker Arcelormittal finished over 11 percent higher, with major miners including Anglo American and Glencore, closing up over 8 percent.

This helped propel London's mining-heavy FTSE 100 index, which ended 2.6 percent higher.

Syngenta shares closed 2.5 percent up after the Swiss agrochemicals group said it was in talks with Monsanto, ChemChina and other companies but has not yet received a concrete takeover offer.

French pharmaceutical firm Sanofi finished around 2.8 percent higher after it said it had submitted an application to the U.S. Food and Drug Administration for a new diabetes drug.

Shares in Games Digital tanked almost 38 percent, after the British video games retailer said in a trading update that it expected first half profits to fall due to the U.K.'s "challenging" market conditions and disappointing sales.