By Simon Miller

European market sentiment maintained its optimistic stance to the end of trading today with major bourses all up at close.

Investors maintained confidence in newspaper reports that said the European Central Bank (ECB) was preparing to buy massive amounts of Italian and Spanish debt to shore up the eurozone.

The FTSE 100 closed up 44.93 at 5,869.30, while the CAC 40 was up 38.08 at 3,518.66.

The EuroStoxx 50 finished 24.71 up at 2,491.03 and the IBEX 35 closed at 7545, up 75.

ECB officials were reported to be examining proposals to cap on Italian and Spanish bond yields, among other options and the ECB’s director-general of market operations, Ulrich Bindseil, was reportedly spearheading the plans in talks with experts from the ECB’s family of national central banks. Market, monetary policy and risk management committees are working to put together a draft.

“They don’t take sides. They just lay out the pros and cons and leave it to the governing council to decide,” one EU diplomat told the Daily Telegraph.

This morning Spain sold €4.5bn (£3.53bn) of 12- and 18-month T-bills, with average yields falling to 3.07% on the 12-month bill from 3.918% in July while the 18-month paper fell to 3.335% compared with 4.242% previously.

The UK saw £1.35bn of 17yr index-linked bonds sold at a real yield of -0.025% while the European Financial Stability Facility placed €1.499bn of six-month bills at a yield of -0.0179%, compared with -0.0113% at the previous auction in July according to the German central bank.

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