London - European stocks rose, trimming their worst January drop since 2008, after the Bank of Japan’s (BoJ) added stimulus stoked optimism of policy support for global growth.
The Stoxx Europe 600 Index rose 0.7% at 11:44, narrowing its weekly loss to 0.3%, after the Bank of Japan announced a negative interest rate to aid its economy. The benchmark, which has moved more in step with crude prices lately, trimmed a gain of as much as 1.6% after energy shares pared an earlier rally.
“We were not expecting such a bold move from BoJ so the market is cheering their decision,” said Stephane Ekolo, chief European strategist at Market Securities in London. “As the BoJ has done its move, now the ECB will follow suit. When we look at all the negative news we’ve had lately, this is a bit of sunshine in the cloudy picture.”
Equities have had a wild ride this year as China’s slowdown and an oil rout spurred anxiety about the global economy. After reaching a 15-month low last week, the Stoxx 600 got a boost from Mario Draghi’s comments that the European Central Bank may reconsider its policy stance in March. Today’s gains trim its January losses to 7.7%.
Lenders in Italy and Spain led gains in the sector, boosting the country’s benchmarks. Banco Popular Espanol SA rallied 7.6% after saying net interest income improved in the fourth quarter. Banco de Sabadell SA and Banco Popolare SC also gained at least 6.2%. The IBEX 35 Index and the FTSE MIB Index were the best performers in western Europe, up 1.5%.
Among stocks moving on corporate news, Gamesa Tecnologica SA surged 16% after a report that Siemens AG is exploring an acquisition of the company. Telefonica SA advanced 2.6% after saying it will offer employees early retirement in a plan that will save money in the long term.
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