Global stocks - European Shares

Global stocks hit two-month high on dovish Draghi message

The prospect of yet more European Central Bank stimulus pushed world stocks to a two-month high, the euro to a two-month low and left investors paying for the privilege of owning short-term Italian and Spanish bonds.

European shares and bonds kept climbing on Friday after soaring on Thursday's message from ECB chief Mario Draghi that the central bank was ready to adjust "the size, composition and duration" of its QE program.

It was set to be the fourth straight week of gains for MSCI's 45-country All World index .WORLD as the euro's nose dive back to $1.11 .DCY put the dollar on course for its biggest weekly rise against the major currencies since late May.

For investors hoping for a positive jolt to the lackluster global economic growth outlook, it was shaping up to be the second straight week of near 4 percent falls in oil prices LCOc1, which were edging higher on Friday.

The pan-European FTSEurofirst 300 index .FTEU3 rose 1 percent, building on a 2.1 percent gain in the previous session, while the euro zone's blue-chip Euro STOXX 50 index .STOXX50E advanced by 1.2 percent.

Bond market moves were perhaps the most eye-catching though. Italian IT2YT=TWEB and Spanish <ES2YT=TWEB > two-year government bond yields both turned negative for the first time ever, meaning that investors now pay to hold them rather than receive interest on them.

Greece's bond 'curve' was also close to normalizing, having been distorted for months in the wake of a political crisis.

Investors were spurred on by the prospect not only of the ECB increasing its bond buying but also of it cutting one of its main interest rates, the deposit rate, even further into negative territory.