European Shares Rally Ahead Of EU Energy Ministers Meeting

(RTTNews) - European stocks were sharply higher on Friday, a day after the European Central Bank (ECB) raised interest rates by a record 75 basis points and signaled further hikes to tame runaway inflation.

The ECB must raise interest rates further to prevent record euro-zone inflation from spilling over into wages, Governing Council member Klaas Knot said.

Separately, Slovakia's Peter Kazimir called for "resolute hikes" to tackle "painfully" high inflation.

Meanwhile, investors shrugged off data showing that French industrial production fell for the first time in three months in July.

Industrial production declined 1.6 percent from June, when output was up 1.2 percent, the statistical office Insee said. This was the first fall in three months.

Economists had forecast a moderate 0.5 percent drop for July.

The focus now shifts to a meeting of European Union countries' energy ministers later in the day, where they will attempt to forge a united response to shield citizens from sky-high energy prices as winter approaches.

The pan European Stoxx 600 rallied 1.6 percent to 420.65 after rising half a percent in the previous session.

The German DAX jumped 1.5 percent, France's CAC 40 index added 1.8 percent and the U.K.'s FTSE 100 was up 1.7 percent.

Banks, which would benefit from higher interest rates, advanced on expectations that the ECB will deliver another supersized interest rate increase in October.

Commerzbank, Deutsche Bank, BNP Paribas and Credit Agricole gained 3-5 percent. Telecom Italia surged nearly 3 percent on reports that the telecommunications company is close to kicking off a process to sell a minority stake in its enterprise service arm.

Miners Anglo American, Antofagasta and Glencore soared 5-6 percent as copper prices rose on a weaker dollar.

Cineworld Group shares jumped 18 percent. The entertainment conglomerate and its subsidiaries have received approval for "first day" relief from a U.S. bankruptcy court, giving it immediate access to around $785 million from a $1.94 billion line of credit to support operations.

Self-storage firm Big Yellow Group added 1.2 percent after refinancing its £120 million debt facility.

Vesuvius gained 1.5 percent. The ceramics company said that its Chief Financial Officer Guy Young has resigned to pursue a new opportunity.