Equities end the week stronger after Bank of Japan move

European equities ended the week on a high after the Bank of Japan stunned markets on Friday by voting narrowly to introduce negative interest rates in a bid to revive inflation.

Equities were also underpinned by hopes the US Federal Reserve would go slow on future interest rate hikes following weaker-than-expected GDP data from the world's largest economy.

Japan's central bank said it would charge 0.1 per cent for excess reserves parked with it, an aggressive deflation-fighting policy pioneered by the European Central Bank.

“The BOJ decision was a massive surprise; it’s further money printing from Japan on a massive scale after having told the markets that they’re not doing it. That triggered European investors to push the risk-on button on,” Will Hamlyn, investment analyst at Manulife Asset Management said.

The pan-European FTSEurofirst 300 index closed up 2.3 per cent, bagging its second consecutive week of gains. A turbulent start of the year triggered by concerns over slowing growth in China and tumbling oil prices, however, meant the index lost more than 6 percent overall in January - the worst monthly drop to start a year since 2008.

The Iseq finished 1.67 per cent stronger.

London

The London market soared as Sky said James Murdoch will return to the broadcaster as chairman, almost four years after his resignation in the wake of the phone-hacking scandal. It also reported operating profit up 12 per ent to £747 million (€980m) for the six months to the end of December, while it added 337,000 new customers.

The FTSE 100 Index jumped 152 points to 6083.8, bucking a bumpy month for global stocks that has seen large sell-offs due to fears of slowing global growth and oil price slides. Over January London’s top flight has fallen 2.5 per cent, wiping around £37 billion off share prices.

Germany’s DAX and Cac 40 in France both lifted by more than 1 per cent.

In New York the Dow Jones Industrial Average jumped almost 200 points in early trading.

The pound was down two cents against the US dollar at just under 1.42, after official data showed the US economy eased to an annual rate of 0.7 per cent growth in the fourth quarter, impacted by high inventories and a strong dollar, following 2 per cent annualised growth in the third quarter.

Reuters/PA