FX & CFD trading involves significant risk
European stocks jumped, posting their biggest four-day rally since November 2008, as the Federal Reserve and five other central banks lowered the cost of dollar funding and China cut its reserve ratio for banks.
The Fed, Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis points and extend their authorization through Feb. 1, 2013.
China said it will cut the reserve requirement ratio for banks by 0.5 percentage points from Dec. 5.
Finance ministers of the 27-nation European Union are meeting in Brussels today to seek agreement on how to temporarily guarantee banks’ bond issuance in order to improve funding conditions for lending. EU leaders agreed last month to provide the guarantees to restore investor confidence in banks.
National benchmark equity indexes advanced in every western-European market except Iceland. The U.K.’s FTSE 100 Index increased 3.2 percent, France’s CAC 40 Index jumped 4.2 percent and Germany’s DAX Index surged 5 percent.
A gauge of European banks, which had earlier declined on S&P rating cuts, jumped 4.4 percent. Barclays, Britain’s second- largest lender by assets, surged 6.7 percent to 180.25 pence. Deutsche Bank, Germany’s biggest bank, soared 6.2 percent to 28.62 pence. Lloyds Banking Group Plc jumped 7.1 percent to 24.83 pence.
BHP advanced 6.2 percent to 1,949 pence. Rio Tinto Group, the world’s second-biggest mining company, climbed 6.4 percent to 3,339 pence. Xstrata Plc jumped 6.5 percent to 1,017 pence. A gauge of mining shares rose 6 percent for the best performance in the Stoxx 600.
BP rose 5 percent to 460.75 pence for the largest contribution to the Stoxx 600 index’s advance.
Grifols SA increased 5.4 percent to 12.01 euros for the biggest jump this year. The stock was rated “buy” in new coverage at Deutsche Bank AG.
All posted material is a marketing communication solely for informational purposes and reliance on this may lead to loss. Past performance is not a reliable indicator of future results. Please read our full disclaimer.