European stock markets ended on a positive note on Wednesday as the central banks around the world decided to reduce their exposure in money markets. Peoples Bank of China also lowered its bank reserve requirements for the first time in last three years which resulted in the optimism in stock markets in euro region. Further US Federal Reserve and European Central Bank also decided to reduce the cost of dollar liquidity.

Strategist, Louise Cooper from BGC Partners commented, “Dollar funding is a big problem and this move acknowledges that. It is also a good thing that central banks from all over the world are acting together in a coordinated manner.”

The Stoxx Europe 600 index gained 3.6 percent to close at 240.08 on Wednesday’s trading session. The German DAX 30 index surged 5 percent to 6,088.84. Banking sector was the leading the German stock exchange and Deutsche Bank AG gained 6.2 percent. Other gainers included Wendel SA which soared more than 16 percent in reaction to the news of TE Connectivity agreeing to buy Deutsch Group SAS owned Wendel. TE Connectivity agreed to buy Deutsch for a total of $2.1 billion.

London’s FTSE 100 index soared 3.2 percent to settle at 5,505.42. Among the major gainers at London Stock Exchange was Barclays PLC which surged 6.7 percent. France’s CAC-40 index jumped 4.2 percent to close at 3,154.62 for the day.