(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* FTSE up more than 1%, pound dips after half-point cut
* Euro zone banking index on course for best day since
October
* Santander, HSBC, BNP Paribas lead gains
* Germany's Knorr Bremse jumps on China unit recovery
(Adds comments, details; updates prices)
By Sagarika Jaisinghani and Medha Singh
March 11 (Reuters) - European shares rose on Wednesday for
the first time in five sessions, as the Bank of England made an
emergency half-point cut to interest rates and launched a
package of other measures to combat a coronavirus-driven
economic slowdown.
The benchmark STOXX 600 was up 1.6%, with London's
FTSE 100 rising 1.2% after the BoE unexpectedly cut
rates, joining a slate of central banks including in the United
States, China, Canada and Australia.
The move also lifted sentiment in Germany, France
and Spain, with bourses there adding between
1.9% and 2.2% following four days of declines driven by the
virus and a weekend collapse in oil prices.
"This was the way for the BoE to show the markets that they
are prepared," said Elwin de Groot, head of macro strategy at
Rabobank.
"It's not going to help the economy in a major way but it
may smoothen the economic impact and it may also allow for a
smoother recovery."
European stock markets had attempted a rebound on Tuesday
from the worst global sell-off since the 2008 financial crisis,
but ended lower after a jump in infections across the bloc.
With Italy in total lockdown and business activity in danger
of grinding to a halt, governments and central banks in the
European Union have scrambled to come up with ways to protect
the economy from sliding into recession.
The executive arm of the EU said on Tuesday it would set up
a joint investment fund with firepower of 25 billion euros ($28
billion) from existing resources, but stopped short of adding
fresh funds to the basket.
All eyes are now on the European Central Bank policy meeting
on Thursday, with expectations running high of another rate cut
from the bloc.
ECB President Christine Lagarde was reported as having told
EU leaders in a conference call on Tuesday night that
policymakers were looking at all tools ahead of the meeting,
particularly ones to provide "super-cheap" funding.
Her comments sent the euro zone banking index
soaring 3.9%, with gains on the STOXX 600 led by Santander
, HSBC and BNP Paribas.
In news-driven moves, Knorr Bremse, a German maker
of braking systems for rail and commercial vehicles, jumped 8.4%
to the top of the benchmark index after saying its business in
China was ramping up again.
On the other hand, G4S, one of the world's largest
private security firms, tumbled 17.4% to its lowest since 2004
after posting an annual statutory loss as it took a charge
related to its UK cash business. [nL4N2B41ZF}
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Anil D'Silva and Patrick Graham)
