UPDATE 1-Markets cheer China rate cut
LONDON Oct 23 (Reuters) - European shares turned higher and the Chinese offshore yuan fell against the dollar on Friday after China cut deposit and lending rates to ease monetary policy in the face of slowing growth.
U.S. equity futures also extended gains after the announcement, while U.S. Treasury 10-year bond yields hit a two-week high of 2.08 percent, up 5 basis points on the day.
There was less of an impact on euro zone bond markets, with the German 10-year yield edging up 1 bps after the move to touch a day's high of 0.53 percent.
Traders and investors said the cut added to perceptions that the post-crisis, central-bank-fuelled market rally was here to stay. Comments by European Central Bank chief Mario Draghi on Thursday pointed to potentially more policy easing in future.
"(Chinese economic) conditions remain weaker than authorities would prefer ... For markets, this is a risk-positive move given that the aim is to stimulate Chinese activity," said Philip Shaw, an economist at Investec.
At 1157 GMT, the pan-European FTSEurofirst 300 was 2.1 percent higher at 1,492.60 points, with miners up more than 3 percent. China's offshore yuan hit a four-week low of 6.3958 to the dollar after the decision. (Reporting by Alistair Smout and Jemima Kelly; Editing by Lionel Laurent and Catherine Evans)
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