European Stocks Surge on China Rate Cut; STOXX up 2%

European stocks extended gains Friday in early afternoon trade as China’s central bank cut interest rates for the sixth time since November.

The STOXX 600 shot up higher after opening the session in positive territory. Sentiment had been buoyed after the European Central Bank (ECB) signaled on Thursday its willingness to extend its bond-buying program.

ECB President Mario Draghi said the bank’s 1 trillion euro bond-buying program policy would need to be “re-examined” in December. He added that the governing council would be ready to use all its available instruments within its mandate. This suggests that the quantitative easing program could be extended beyond September 2016 and even into 2017, some analysts believe.

The ECB’s announcement prompted a rally in Wall Street and Asia overnight where stock markets mostly jumped on Friday.

PBoC rate cut boosts miners, autos

The People’s Bank of China (PBoC) lowered its one-year benchmark lending rate by 25 basis points to 4.35 percent, effective from October 24.

Basic resource stocks got a boost with the sector rallying strongly. Glencore was over 6 percent higher while Fresnillo and Anglo American were both in the green.

Auto stocks were also higher. Porsche was one of the top performers in the sector with Germany’s BMW and Daimler both trading positively.

CNBC

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