European stocks surged on Friday to a three-month high on expectations that the European Central Bank (ECB) will inject more stimulus into the economy. The FTSEurofirst 300 index is up 3.5% this week and 0.4% on the day. The Euro STOXX 50 is up 0.5% on the day.
The ECB’s president, Mario Draghi, claims that he will take quick action to help boost inflation rates. Major changes have been highlighted by the ECB, including the asset purchase program and adjusting the deposit rates as to the main measures that will be taken.
European tourism corporations took a major hit this week following the terrorist attacks in Paris last weekend. Air France (AF) saw the company’s stock drop 6% percent this week, and a reduction in bookings has been noted. The impact of the attacks is still not determined, according to the company. Air France’s stock is up 0.9% on Friday.
Defense stocks have risen sharply this week, with BAE Systems (BA) stock up 1.92% on Friday and over 11% on the week. The stock was considered a “sell” by analysts, but has now been upgraded to a “buy” following the terrorist attacks. Investors believe that the risk of cutting defense budgets is much lower and will help the company maintain profitability in 2016.