(MENAFN- AFP) European stocks rose sharply on Friday, boosted by Bank of Japan stimulus and upbeat earnings, but the euro and gold fell heavily.
The euro dived below $1.25 for the first time for more than two years, driven by speculation that the US Federal Reserve could raise interest rates sooner than expected.
And with problems crowding in on the Russian economy, the ruble fell to another record low against the dollar despite defensive action by the Russian central bank which ramped its key rate up to 9.5 percent from 8.0 percent.
At around midday, London's FTSE 100 index was up 1.11 percent to 6,535.40 points, in a climate of diverging monetary policies by leading central banks.
Frankfurt's DAX 30 gained 2.09 percent to 9,305.51 points and the Paris CAC 40 advanced 2.13 percent to 4,229.60 compared with Thursday's close.
Wall Street opened at a new record high level, with the Dow Jones industrial index adding 0.56 percent and the tech-rich Nasdaq advancing 1.64 percent.
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 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.
At Capital Economics, chief economist Julian Jessop said that "the Bank of Japan's announcement today ... is a timely reminder that not everyone has to follow the Fed" and it would probably boost share prices worldwide.
This would be particularly the case "in the eurozone if expectations build that the ECB will follow with full-blown QE (stimulus) of its own. More evidence of the diverging prospects for monetary policy should also provide an additional boost to the dollar across the board."
Asian markets leapt and the dollar pushed past 111 yen after the Japanese central bank acted, and after the United States released forecast-busting economic growth data.
- 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.
Meanwhile, the price of 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, shares in French bank BNP Paribas jumped 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.
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 on increased third-quarter profits.
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