European stocks rally as Bank of England stays hand

Europe's main stock markets shrugged off a Bank of England decision to leave rates unchanged Thursday, as Frankfurt rallied back above 10,000 points for the first time since Britain voted to exit the EU.

All eyes were on London after the appointment of a new British finance minister and with traders waiting to see if the Bank of England would cut its main interest rate to a new record-low level under 0.50 percent.

Mid-morning, London's benchmark FTSE 100 index was 1.0-percent higher compared with Wednesday's close -- but it slipped back to post a meagre 0.2-percent advance by mid-afternoon after an 8-1 vote to leave rates alone which lifted the pound against the dollar and the euro.

Eurozone indices won more ground, with Frankfurt's DAX 30 jumping 1.5 percent and the Paris CAC 40 adding 1.2 percent.

About 30 minutes into Wall Street trade, the Dow Jones Industrial Average was at 18,503.10, up 0.7 percent, the broad-based S&P 500 climbed 0.6 percent to 2,164.55 and the tech-rich Nasdaq Composite Index rose 0.5 percent to 5,031.38.

Briefing.com analyst Patrick O'Hare identified an overall "party mood" on expectations of more stimulus from central banks and in Japan.

By indicating a possible August rate cut, O'Hare said the Bank of England "did nothing to take away the stimulus punch bowl from which the market has been drowning its sorrows, raising the roof, and pretty much partying like it's 1999."

In foreign exchange, the pound extended a recovery from recent 31-year lows against the dollar.

In Asia, Japan's main stocks index led a regional rally to post a fourth straight gain as investors took heart from another record close Wednesday on Wall Street.

The Nikkei index has now wiped out all the losses sustained after Britain's shock vote to leave the EU, while the yen sank further as traders await details on promised government economic stimulus.

Tokyo has been the stand-out performer with Prime Minister Shinzo Abe expected to unveil a new round of spending as the world's number-three economy limps along.

Elsewhere Thursday, Hong Kong shares rose 1.1 percent but Shanghai ended down 0.2 percent, a day after China unveiled data showing imports and exports both fell last month, reinforcing worries about its slowing economy.

China's yuan dropped to its lowest in nearly six years on the back of the trade data.

"All eyes are on China's economic data for the second quarter," said Andy Ji, a foreign-exchange strategist at Commonwealth Bank of Australia.

- Key figures around 1400 GMT -

London - FTSE 100: UP 0.2 percent at 6,682.86

Frankfurt - DAX 30: UP 1.5 percent at 10,073.04

Paris - CAC 40: UP 1.2 percent at 4,390.02

EURO STOXX 50: UP 1.4 percent at 2,969.19

Tokyo - Nikkei 225: UP 1.0 percent at 16,385.89 (close)

Hong Kong - Hang Seng: UP 1.1 percent at 21,561.06 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,054.02 (close)

New York - DOW: UP 0.1 percent at 18,502.10

Dollar/yen: UP at 105.81 yen from 104.52 yen Wednesday

Pound/dollar: UP at $1.3304 from $1.3144

Euro/dollar: UP at $1.1110 from $1.1089