Europe Markets: European stocks climb and Italian bonds rally after ECB asset-purchase plan

European stocks climbed in early action Thursday after the European Central Bank surprised markets by unveiling a major asset-purchase program to combat the financial difficulties caused by the coronavirus outbreak.

The Stoxx Europe 600 SXXP, +1.43% climbed 1.3%, led by many of the beaten-up stocks of the last month, including cinema operator Cineworld CINE, -27.68% and insurer CNP CNP, +16.25% .

The French CAC 40 PX1, +3.18% and Italian FTSE MIB I945, +4.68% each rose over 3%. The U.K. FTSE 100 UKX, +0.71% edged up a more modest 0.6%.

The ECB said it would buy private and public sector securities worth 750 billion euros in what it labelled the Pandemic Emergency Purchase Program.

ECB President Christine Lagarde said that “there are no limits to our commitment to the euro,” which reminded many of the “whatever it takes” comments from Mario Draghi, her predecessor.

“The policy reactions did not come with one big coordinated swoop, but the package of government stimulus, liquidity and guarantees combined with Lagarde’s ‘whatever it takes’ as it stands right now is strong,” said analysts at ING Economics.

The ECB move had a big impact on Italian government bonds, with yields falling 63 basis points on the Italian 10-year TMBMKIT-10Y, -27.67% to 1.66%. Yields move in the opposite direction to prices.

Meanwhile, the U.S. Federal Reserve announced a program to support money-market mutual funds, and the U.S. Senate approved the House-passed coronavirus legislation which grants sick leave to hourly employees and expands unemployment insurance, as negotiations continue on a broader stimulus package.

Of stocks on the move, Dutch insurer Aegon NV AGN, +10.06% jumped 10% after saying it hasn’t so far observed any material impact on claims ratios due to the coronavirus pandemic.

Munich-based lighting manufacturing Osram Licht OSR, -0.40% slumped 13% after withdrawing 2020 targets.