European markets up on stimulus hopes

ahead of the latest Bank of England interest rate decision.
Elsewhere, Madrid’s IBEX 35 index leapt 1,48 percent to 6 514,70 points, the Paris CAC 40 won 0,63 percent to 3 077,85 points and Frankfurt’s DAX 30 gained 0,45 percent to 6 121,92 points.
The European single currency nudged lower to US$1,2579, compared with US$1,2580 late in New York on Wednesday.
Recent poor economic data has sparked fears over the health of the global economy and prompted speculation that the world’s leading central banks would implement emergency stimulus plans to boost activity.
The Bank of England is widely tipped to leave borrowing costs at a record low of 0,5 percent yesterday, but it could decide to pump more cash into the nation’s recession-hit economy.
And in the afternoon, US Federal Reserve chairman Ben Bernanke will make a key speech to Congress, while investors will also digest the latest American unemployment figures.
“Weaker economic data from around the world has meant that investors are looking towards the Bank of England and the Fed today to step in,” said IG Index analyst Chris Beauchamp.
“The European Central Bank (ECB) failed to step up to the plate yesterday, keeping rates on hold at 1,0 percent, so the hope is that central bankers in the Anglo-sphere will be more amenable.
“This, of course, sets us up for a nasty drop if they don’t deliver the goods, yesterday’s                   rally having been built firmly on expectations of more quantitative easing in the United States.”
Spain’s borrowing costs soared in a major bond test yesterday but the nation proved it can access the market despite growing fears of a banking bailout.
Madrid raised 2,074 billion euros in the auction, but the funds came at a high cost, with the 10-year bonds fetching more than 6,0 percent — a rate widely regarded as unsustainable over the longer term.
“The Spanish auctions went well with all issues overbid. However, rates all a little higher versus previous sales,” said analyst Mike Mason at Sucden Financial Private Clients.
“This seems to have eased immediate pressure on banks, with this sector higher in Germany, France and UK.” — AFP.