Europe midday: Stocks boosted by PBoC's RRR cut

LONDON (ShareCast) - The decision by China's central bank to loosen policy provided a boost to European indices. The People´s Bank of China (HKSE: 3988-OL.HK - news) lowered the reserve requirement ratio (RRR) by 100 basis points to 18.5%, effective from 20 April. The cut was bigger than expected by analysts and was the largest decrease since late 2008.

"The markets were buoyed this morning by the news that China's central bank has taken fresh, if tentative, steps in combatting the economic slowdown," said Spreadex analyst Connor Campbell.

The report lifted mining stocks, including Anglo American (LSE: AAL.L - news) , BHP Billiton (NYSE: BBL - news) , Rio Tinto (Xetra: 855018 - news) and Outokumpu Oyj (Xetra: OUTA.DE - news) , as industrial metals gained.

Developments in Greece continued to be under close watch as International Monetary Fund (IMF) chief Poul Thomsen said talks have gathered momentum but still have a long way to go.

Greece is negotiating with the IMF and the EU on a package of economic reforms in order to unlock a further €7.2bn bailout tranche.

The euro fell 0.62% to $1.0739 at midday.

Standard & Poor's said it expects the slowdown in China to continue, but the Eurozone, US, Japan and India "should all grow faster".

"The European Central Bank's quantitative easing programme is a significant policy shift that should help underpin a surprisingly robust cyclical upswing," S&P said in a report.

In commodities, Brent crude fell 0.016% to $63.44 per barrel at 11:58 BST while West Texas Intermediate grew 0.46% to $56.00, ICE data revealed.

Petrofac slides Petrofac slumped after saying it expects a further loss on its Shetland gas project this year, due to delays and higher costs.

Tesco (Xetra: 852647 - news) dropped after the Financial Times reported the grocer may post an annual loss of as much as £5bn on Wednesday.

Fresenius Medical Care AG (Other OTC: FMCQF - news) gained after a report said it's discussing a purchase of Israel's Nephromor.

Telenet Group Holding jumped after agreeing to buy Royal KPN NV's Belgian mobile-phone business Base for €1.33bn. KPN (Amsterdam: KPN.AS - news) gained.