European equities bounced back Friday, tracking a strong rally in Asian shares after the Bank of Japan stunned markets by announcing negative interest rates in a bid to boost the economy.
Japan’s central bank said it would charge 0.1 percent for excess reserves parked with the institution, an aggressive policy pioneered by the European Central Bank.
“The signal that the Bank of Japan gives reminds us that central banks will continue to play their role of fighting deflation,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
“These actions typically drive up risky assets,” he added.
The pan-European FTSEurofirst 300 index rose 1.6 percent by 0815 GMT after having fallen 1.7 percent in the previous session.
JCDecaux shares surged 8.6 percent, the top FTSEurofirst 300 gainer, after the French outdoor advertising company reported higher revenues.
Shares in Italy’s Banca Monte dei Paschi di Siena also rose after the Monte Paschi CEO told an Italian newspaper that a tie-up with rival UBI Banca could make sense.
However, Norwegian fertiliser producer Yara fell 2.4 percent after posting fourth-quarter core profit below expectations, hit by lower sales and an impairment related to its plants in France and Trinidad.
Source: Reuters
