Paris stocks surge 3 percent after ECB interest rate cut

PARIS: French stocks surged more than three percent on Thursday after the European Central Bank in a surprise move cut its key interest rate by a quarter of a percentage point to 1.25 percent.

At 1300 GMT, the CAC 40 was up 3.20 percent to 3,210.25 points, with bank shares taking off as BNP Paribas gained more than 10 percent.

France's blue-chip exchange had already been on the rise after sharp falls early Thursday on rumours that Greece would cancel plans to hold a referendum on its bail-out plan.

But it was given a boost after the ECB's policy-setting governing council voted to lower the rate for its main refinancing operations by a quarter of a percentage point to 1.25 percent at its regular monthly meeting, the first to be chaired by the bank's new president, Mario Draghi of Italy.

French banks were seeing major gains, with BNP Paribas up 10.91 percent to 32.91 euros, Societe Generale up 7.22 percent to 18.88 euros and Credit Agricole up 7.18 percent to 5.35 euros.

Copyright AFP (Agence France-Presse), 2011