European Stocks Soar on Bank of England's U-Turn

European stocks continued their upward trend for a second consecutive session on the 17th, buoyed by the Bank of England's decision to halt gilt sales and steady policy rate. The STOXX Europe 600 closed up 0.86% at 642.60, with Germany's Xetra DAX rising 0.70% to 25,716.71 and France's CAC 40 gaining 0.57% to 8,186.93.

The Bank of England's move marked a reversal of its quantitative tightening policy, sending UK bond yields sharply lower and underpinning investor sentiment. The FTSE 350 Banks index rose 1.59%, with banking heavyweights HSBC up 2.0% and Standard Chartered gaining 2.2%.

Despite the Bank of England's decision, Governor Andrew Bailey cautioned that a prolonged military conflict in the Middle East could necessitate further monetary tightening, with markets pricing in at least a 25-basis-point rate hike by year-end.