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Europe surges 2% at close on China cut; earnings eyed

European stocks rallied to close sharply higher Friday as investors cheered China's central bank as it cut interest rates again, while digesting a fresh set of corporate earnings.

The STOXX 600 shot up finishing provisionally 2 percent higher, with the German DAX soaring up 2.9 percent at the close.

Alongside China's rate cut, sentiment was buoyed after the European Central Bank (ECB) signaled willingness to extend its bond-buying program on Thursday.

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ECB President Mario Draghi said the bank's 1 trillion euro bond-buying program policy would need to be "re-examined" in December, with the governing council ready to use all available instruments within its mandate. This suggests that the quantitative easing program could be extended beyond September 2016.

The ECB's announcement prompted Asia stocks to jump, while China's rate cut and positive tech earnings helped U.S. stocks trade sharply higher on Friday.

Read More 3 ways to trade the 'Draghi Santa rally'

In data news, manufacturing and services output in the euro zone rose above all expectations in October, according to figures from Markit. The composite purchasing manager's index (PMI) came in at 54.0, up from 53.6 in September.

PBoC rate cut boosts miners, autos

The People's Bank of China (PBoC) lowered its one-year benchmark lending rate by 25 basis points to 4.35 percent, effective from October 24.

Basic resource stocks got a boost with the sector rallying strongly. Anglo American and Fresnillo closed up 2.2 and 3.8 percent respectively. Auto stocks finished on a high too with Porsche and Germany's BMW & Daimler all ending sharply higher.

Oil prices however sank on the news, with Brent trading at $47.72 a barrel, while U.S. crude slumped, last stood $44.55 at the close.

Luxury soars; Moller-Maersk, Ericsson tank

Earnings season continued in full force. Kering, the owner of Gucci, reported revenue of 2.89 billion euros in the third quarter, a 12 percent year-on-year rise, sending shares surging, to close up 10.6 percent, which gave a boost to other luxury players including Burberry and LVMH.

Shares in Cable & Wireless ended 6.6 percent higher after Liberty Global confirmed it was in talks to buy the company.

And metals mining company Boliden saw shares finish over 5 percent higher after it reported a rise in third-quarter net profit as high production at its smelters offset low metal prices.

On the other end, U.K. telecoms firm TalkTalk saw its shares drop as much as 10 percent before closing down 4.3 percent, after it said it was a victim of a "significant and sustained cyberattack" on its website in which user data could have been compromised.

Shipping giant Moller Maersk ended down 5.2 percent after it slashed its profit outlook for the year saying that the "shipping market deteriorated" beyond expectations.

Ericsson shares tanked, closing 6 percent down after it posted third-quarter revenue that came in below market expectations, with sales in China falling. The news dragged down other names in the sector including Nokia.

British gambling firm William Hill slumped to close down 7.9 percent after it issued a profit warning saying that it will be near the lower end of analysts' forecasts after a weak third quarter.