- POSTED: 05 Jun 2014 22:56
- UPDATED: 05 Jun 2014 22:57
Germany's main stock index breached 10,000 points for the first time ever on Thursday after the European Central Bank cut its key interest rates and unveiled new measures to support bank lending.
BERLIN: Germany's main stock index hit a record high and the euro tumbled to a four-month low on Thursday after the European Central Bank cut all of its key interest rates.
Frankfurt's DAX 30 rose more than 0.8 percent to breach 10,000 points for the first time ever after the ECB cut its central refi refinancing rate to 0.15 percent, from 0.25 percent previously.
The euro also fell on the news, retreating 0.15 percent to $1.3558 -- its lowest level since February 6.
In a move hailed as "unprecedented" by analysts, the ECB lowered the rate at which the central bank pays commercial banks for depositing their unused cash into negative territory for the time, cutting it from zero percent to minus 0.10 percent.
The bloc's central lender also trimmed the interest rate on its marginal lending facility to 0.40 percent from 0.75 percent.
ECB head Mario Draghi at a press conference after the announcement said that rates "will remain at present levels for an extended period of time in view of the current outlook for inflation".
"For all the practical purposes we have reached the lower bound," he added, and also said the bank did not expect the threat of deflation develop into a fact.
The move also supported other European indices.
The CAC 40 in Paris shot up from a gain of 0.38 percent before the decision, to trade up 1.53 percent at 4,570.09 after the announcement.
London's FTSE 100 index of top companies switched from a loss to a gain of 0.23 percent at 6,834.65 points.
French President Francois Hollande welcomed the move, saying that the ECB recognized that the danger facing the eurozone was "not inflation, it is deflation, it is the risk that the economy does not recover and that states can no longer secure financing".