European stock markets surged and the euro sank on Thursday after the European Central Bank (ECB) surprised by cutting already ultra-low interest rates to prop up a struggling economy.
Faced with signs of further deterioration in the euro zone's prospects, the central bank cut all of its interest rates by another 10 basis points to new record lows, putting its deposit rate further into negative territory.
European stock values jumped around half a percent in response, while the euro sank as much as a cent on the day.
Spanish, French and Portuguese stocks all gained almost a full percentage point , while Germany's DAX rose 0.3 per cent. That pushed the blue chip FTSEurofirst index up 0.7 per cent on the day. The euro, already suffering from expectations of more policy loosening by the ECB, fell to a session low of $1.3036.
A month-long march higher for European and Asian stock markets had stalled earlier in the day on concerns the bank would do nothing immediate at the September meeting to address a deteriorating economic outlook. The US Federal Reserve is on the verge of halting its own programme of bond-buying.
