European shares closed sharply higher on Friday as investors reacted to a surprise policy move by the Chinese central bank and dovish words by Mario Draghi, the president of the European Central Bank (ECB).
The pan-European Euro Stoxx 600 index closed over 2 percent higher as mining stocks – with their heavy exposure to the world’s second largest economy – surged close to 6 percent on the news. China’s central bank announced it was cutting its benchmark lending and deposit rates and giving banks more freedom.
In early afternoon trade, the ECB also announced it had started its planned purchase of asset-backed securities, in a move to encourage banks to lend and revive the economy, helping to buoy sentiment further.
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