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European stocks rally after ECB unveils more stimulus
[MILAN] European shares rose sharply on Thursday, extending earlier gains after the European Central Bank unveiled more stimulus in a bid to boost growth and inflation in the region.
The ECB unexpectedly cut its main refinancing rate to zero, and pushed the interest rate on the deposit facility deeper into negative territory, while lifting the size of its asset purchase programme by more than expected.
The pan-European FTSEurofirst 300 index rose 2.5 per cent by to touch its highest level since Jan. 13, and euro zone's blue-chip Euro STOXX 50 index rose 3.6 per cent.
The ECB's decision, the second stimulus cocktail in three months, put the euro under pressure, and this in turn helped European stocks, since a weaker euro makes European companies' exports more affordable overseas. "The weak euro is positive for equities," said Hantec Markets' analyst Richard Perry.
Banking sectors stocks and insurers were the top sectoral gainers after the ECB decision, both gaining more than 3 per cent. Italian lender UniCredit was the top gainer on the FTSEurofirst with a rise of 11 per cent.
British insurer Aviva rose 5 per cent after posting higher profits and dividends, while reinsurer Hannover Re also climbed after it increased its total dividend and its net profit surpassed the billion-euro mark for the first time.
However, Lagardere shares slumped 8.5 per cent after results from the media group underwhelmed investors, while fertiliser group K+S also fell 5.8 per cent after it warned of a significant drop in operating profit this year.