European stocks rallied and borrowing rates for Spain and Italy slid yesterday as markets hailed exceptional bond-buying measures from the European Central Bank aimed at fighting the debt crisis. London’s FTSE 100 index of top companies closed up 2.11% to 5,777.34 points, as traders also digested the Bank of England’s decision to keep record-low rates unchanged. But other leading markets surged even further after the European Central Bank announced a highly anticipated programme to ease sovereign borrowing prices. In Frankfurt, the DAX 30 won 2.91% to 7,167.33 points, while in Paris the CAC 40 rose by 3.06% to 3,509.88 points. In Spain and Italy, currently the flashpoints of the debt crisis, Madrid stocks skyrocketed 4.91% and Milan gained 4.31%. “The market very much appreciated that the ECB is ready to intervene in an unlimited fashion,” said Yves Marcais, trader at Global Equities. “Above all, there were no surprises” given the high expectations, he added. “Everything is beginning to fall into place.” In foreign exchange deals, the euro dipped to $1.2575 from $1.2600 late in New York on Wednesday. The dollar rose to ¥78.91 from ¥78.38 on Wednesday. “The ECB did not disappoint in its decision to start a vast bond purchase programme,” said Marie Diron, senior economic adviser to the Ernst & Young Eurozone Forecast. “While we had little doubt that such a programme would be announced, some of the details go beyond what we expected,” she said. US stocks also surged higher after the ECB announcement and encouraging US jobs data. The Dow Jones Industrial Average soared 1.82% in midday trade, the S&P 500 index advanced 1.94%, and the tech-heavy Nasdaq jumped 2.03%. In a widely-anticipated bid to save the euro, ECB president Mario Draghi said the central bank would buy unlimited volumes of short-term eurozone government bonds. Draghi unveiled a new central bank instrument known as Outright Monetary Transactions (OMTs) - purchases of sovereign bonds in secondary markets, but stressed that governments would also have to fulfil strict conditions for the ECB to intervene. The programme, which replaces a highly-contested previous one called the SMP, covers sovereign bonds with maturities of up to three years, Draghi told a news conference. The bank has set no limit to the volume of bonds it will purchase under the new programme, he added. Berenberg Bank economist Holger Schmieding commented that “after one year in which the ECB allowed turmoil in sovereign bond markets to obstruct the transmission of its monetary policy, the ECB is now addressing the core issue in the eurozone crisis. From gulf times.