European shares hit 6-1/2 yr high as ECB ramps up stimulus
(Updates prices at settle)
* FTSEurofirst 300 up 1.1 pct, hits highest level since 2008
* Broad-based rally as ECB unveils new stimulus
* Banks lead gains, seen benefitting from ABS purchases
By Francesco Canepa
LONDON, Sept 4 (Reuters) - European shares rose on Thursday, with a benchmark hitting a 6-1/2 year high, as the European Central Bank further cut interest rates and unveiled plans to buy assets in a bid to shore up inflation in the euro zone.
The ECB unexpectedly cut interest rates to record lows and the bank's president Mario Draghi said it would start buying securitised loans and covered bonds next month to help unblock lending in the euro zone.
Yields on euro zone sovereign bonds fell, further boosting the attractiveness of stocks in a low-return environment. The the FTSEurofirst 300 index of top European shares offers a 3.3 percent yield, compared to 2.4 percent on Italy's 10-year bond.
The FTSEurofirst 300 closed up 1.1 percent at 1,399.43 points, having set its highest level since early 2008 at 1,400.99 points. The index risen around 8 percent since mid-August as investors anticipated the ECB's move. Continuación...