London - AFP
European equities and the euro rose on Friday, extending the previous day\'s rally after the European Central Bank unveiled a key plan to buy the bonds of troubled eurozone nations. In morning trade, Frankfurt\'s DAX 30 index of leading shares jumped 0.78 percent to 7,223.57 points and in Paris the CAC 40 won 1.46 percent to 3,560.75 points, while London\'s FTSE 100 index added 0.08 percent to 5,781.62. Madrid stocks advanced 1.49 percent and Milan surged by 2.26 percent, underpinned by falling government bond yields in the wake of the ECB plan. In foreign exchange deals, the euro rose above 100 yen for the first time in two months. The single currency also jumped to $1.2686 -- which was the highest level since June 29. ECB chief Mario Draghi said Thursday that the central bank would buy unlimited amounts of debt from troubled nations like Spain and Italy, in a bid to bring down borrowing costs and prevent the eurozone debt crisis spreading. The news gave markets a huge shot in the arm, sending share prices soaring in Asia, Europe and on Wall Street. Asian stocks were also bolstered by Chinese plans for infrastructure investment, dealers said. \"Draghi\'s rally continues as the stocks are reaping the rewards of freshly-announced ECB stimulus efforts,\" said trader Anita Paluch at Gekko Global Markets. \"Although it\'s hard to call the programme a surprise as the outline has been known for a while, it has been received with great optimism.\" In reaction, Spanish borrowing costs fell below the 6 percent mark on Friday for the first time since May. The yield -- or rate of return -- of Spain\'s 10-year government bonds fell to 5.749 percent at 0830 GMT on the secondary markets, down from 6.030 percent at close on Thursday. Italian rates also eased, reaching 5.198 percent from 5.261 percent a day ago. Draghi said Thursday the ECB would buy unlimited amounts of debt from struggling nations in order to help them get back on their feet -- in a scheme named \"Outright Monetary Transactions\". The OMTs \"will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro\", Draghi said. \"We will do whatever it takes\" to keep the eurozone together, he said. However, Draghi added that the purchases would depend on those countries asking for bailout cash and agreeing to undertake economic reforms. \"Markets reacted positively to Draghi\'s OMT proposals yesterday, seeing in them the possibility that Europe might at last be starting to address some of the more fundamental problems currently afflicting the eurozone,\" said Rebecca O\'Keeffe, head of investment at online brokerage Interactive Investor. \"Draghi\'s previous effort, the LTRO, provided a substantial short-term boost to equity markets, and the carefully-crafted OMT could offer longer-lasting support to both the eurozone and global economy.\" Asian markets also raced higher on Friday, with Hong Kong soaring 3.09 percent, Seoul rising 2.57 percent, Shanghai leaping 3.92 percent and Tokyo surging 2.20 percent. Sentiment was also buoyed by US data showing many more jobs than expected were created in the private sector last month, lifting hopes for the world\'s number one economy ahead of key non-farm payrolls due later Friday. Wall Street surged to new multi-year highs Thursday, helped by the positive data and the ECB\'s new plan for ailing eurozone countries. The S&P 500-stock index and the Dow Jones Industrial Average both registered their best closing levels since December 2007.