RTTNews - The European markets rose for the first time in three days on Thursday, as banking stocks rallied after the Bank of England increased its bond purchase program by £50 billion.

The Bank of England increased the size of its bond purchase program by £50 billion pounds to £175 billion. The Monetary Policy Committee of the Bank of England expects the asset purchase program to take another three months for completion. The central bank had started buying assets using central bank reserves in March and increased its size of the scheme to GBP 125 billion in May. Also today, the British central bank kept its key interest rate at 0.5% as expected.

The European Central Bank left its key interest rate unchanged at a record low of 1% for the third straight month as risks to economic outlook are now balanced.

Germany's factory orders rose 4.5% month-on-month in June, the biggest gain in two years, after an increase of 4.4% in May, data released by the Federal Ministry of Economics and Technology showed Thursday. Economists had forecast a slight increase of 0.6%. Orders grew for the fourth straight month in June.

The U.S. Labor Department said in its report that initial jobless claims fell to 550,000 from the previous week's revised figure of 588,000. Economists had been expecting jobless claims to edge down to 580,000 from the 584,000 originally reported for the previous week.

Crude for September delivery fell $0.97 to $71.00 a barrel on the New York Mercantile Exchange, by the time the European markets closed.

The FTSEurofirst 300 index of pan-European blue chips closed 0.43% higher at 938.49 points, while the narrower DJ Stoxx 50 index rose 0.50% to 2,318.73 points.

Around Europe, the U.K.'s FTSE 100 index climbed 0.93% to 4,690.53, while France's CAC 40 index surged up 0.56% to 3,477.83 and Germany's DAX index rose 0.32% to 5,369.98.

HSBC, Britain's largest bank, rose 4.5%, while Royal Bank of Scotland, the second largest, climbed 9.8% and Barclays, the third largest, surged up 5.1%. Lloyds Banking Group, Britain's biggest mortgage lender, jumped 12.3%.

Aviva, Britain's second biggest insurer, rose 5.4% after the company swung to a first-half profit and its operating profit beat analysts' estimate.

Hannover re, Germany's second biggest reinsurer, surged up 5.9% after the company reported second quarter profit that increased from last year and beat analysts' estimate.

Petroplus Holdings, Europe's largest independent oil refiner, jumped 15% after the company reported second quarter profit that fell from last year but came in above analysts' expectations.

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