European Equities, Euro Rise On Federal Reserve Rate Cut

ByBridgeNews European equities were boosted this morning after the U.S. Federal Reserve's unexpected decision to cut interest rates produced strong rallies on Wall Street. The FTSE-100 benchmark index was up 2.44% at 6,187.30 towards midday in London, off an early high of 6195.30. In Paris the CAC-40 Index was up 2.40% at 5,820.70. Germany's Dax index, which was still trading when the rate cut was announced and made strong gains on the news, was down 0.10% at 6,428.60. The European gains were led by technology and telecoms stocks, as they recouped some of the losses of recent weeks. LM Ericsson AB was up more than 14%, Colt Telecom Group 17% and ARM Holdings 18%. The Federal Reserve cut its key Fed funds interest rate by 50 basis points to 6% Wednesday amid growing concern that U.S. economic growth is slowing. This is the first time the central bank has cut interest rates outside a regular scheduled meeting since the Asian financial crisis in 1998. The Nasdaq Composite index surged 14.2% as a result, its largest-ever percentage gain, and the Dow Jones Industrial Average jumped 2.8%. "It's very good news in the immediate term as it shows (U.S. Federal Reserve Chairman Alan) Greenspan is willing to react to the needs of the market; he's in tune with the needs of the market," one London-based dealer said