(MENAFN- AFP) European stocks rallied Friday, as investors welcomed the Bank of Japan's stimulus boost and upbeat earnings, but gold hit a four-year low on strength of the dollar and improving risk sentiment.
Nearing midday, London's FTSE 100 index jumped 1.12 percent to 6,535.55 points, while Frankfurt's DAX 30 gained 1.73 percent to 9,272.31 points and the Paris CAC 40 advanced 1.86 percent to 4,218.37 compared with Thursday's close.
The BoJ ramped up its vast monetary easing programme on Friday, in a shock move aimed at reviving growth just as the Federal Reserve winds down its own stimulus spree.
The BoJ said on Friday it would add up to 20 trillion yen ($182 billion) to its current asset-buying scheme, bringing it to 80 trillion yen annually.
"Just as the Fed takes away the punch bowl, the BoJ has turned up with a crate of sake," said Capital Spreads dealer Jonathan Sudaria, pointing to diverging trends in monetary policies.
Some economists hold that the European Central Bank may have to ease eurozone monetary conditions even further to ward off risks of deflation. However, the Bank of England is edging towards tighter monetary conditions at some stage.
Asian markets leapt on Friday and the dollar pushed past 111 yen after the Japanese central bank said it would expand the vast monetary easing scheme and after the United States released forecast-busting economic growth data.
The BoJ decision sent the yen sinking to 111.67 against the dollar, a level not seen since January 2008, while the euro rose to 140.48 yen -- last witnessed on September 19.
The European single currency meanwhile sank to a new three-week low at $1.2541 in morning London trading.
- Diverging central bank policy -
Friday's move is the first since the BoJ launched its huge bond-buying scheme in April last year as part of Tokyo's wider plan to conquer years of deflation and jumpstart the economy.
"The move by the BoJ was not only unexpected, but shows the divergence between the major central banks around the globe as the Federal Reserve has just ended monetary stimulus and the BoJ is speeding up the printing presses," added analyst Angus Campbell at traders FxPro.
In reaction, Tokyo's Nikkei index jumped 4.83 percent to 16,413.76 points -- its highest level since November 2007.
Hong Kong stocks surged 1.25 percent, Shanghai added 1.22 percent and Sydney closed up 0.92 percent.
In commodity deals on Friday, gold dived to $1,167.41 per ounce, the lowest point since late July 2010, on the back of the strong dollar.
Gold has fallen sharply since the US Federal Reserve announced Wednesday that it will end its quantitative easing (QE) stimulus, after six years of pumping easy money into the US economy via asset purchases to shore up growth.
The stronger greenback makes dollar-denominated assets, like oil and gold, more expensive for buyers using weaker currencies, which tends to dent demand and prices.
Meanwhile, US benchmark West Texas Intermediate (WTI) oil for December delivery sank 75 cents to $80.37 a barrel and Brent crude for December slid 96 cents to $85.28.
- Bank shares rally -
In company news, French bank BNP Paribas saw its shares soar 4.20 percent to 50.5 euros in Paris, as it surprised investors with a 10.6-percent rise in third-quarter net profit to 1.5 billion euros.
And Royal Bank of Scotland (RBS) shares jumped 4.02 percent to 380 pence, topping London's FTSE 100 risers board.
The state-rescued lender revealed net profits rebounded to £896 million in the three months to September, buoyed by easing charges for devalued assets, cost-cutting and the strengthening British economic recovery.
However, RBS also set aside £400 million for risks from global probes into alleged rigging of the foreign exchange market.
International Airlines Group was the second biggest FTSE gainer, with shares up 3.92 percent at 406 pence.
The owner of British Airways and Iberia logged rising third-quarter profits, lifted by growing revenues and falling fuel costs, and increased its annual earnings forecast.
Wall Street had risen strongly on Thursday on bright results from credit card giant Visa and news that the US economy grew a better-than-expected 3.5 percent in the third quarter.
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