European stocks rally ahead of Bank of England's interest rate decision

STOXX 600 on course for 1% weekly rises.

BoE to stop bond buying at the end of year?

September 23 Reuters - European stocks rallied for a third day as global sentiment improved on easing concerns about cash-strapped developer China Evergrande, while car parts makers surged after earnings update from Faurecia.

The Pan-European STOXX 600 index grew 1.3% to look at the end of the week with solid gains after a sharp selloff on Monday. Automotive stocks were the top gainers with revenue rising more than 1.5%.

Asian stocks rose after Evergrande surged 40% in Hong Kong markets as its chairman sought to reassure investors after the company's unit said it had resolved a coupon payment on an onshore bond.

It was a bit of a September panic, said Miton European Equity Income fund manager Will James. It's a big issue but not necessarily one that will spillover beyond Evergrande and the Chinese property sector. We are at a point where we have had an aggressive COVID recovery, we're past peak growth and there is a question mark over the end of QE quantitative easing The problem with liquidity pulled out from the market brings with it the potential for more volatility. A survey showed euro zone business activity grew at its weakest pace in five months in September as curbs to limit the Delta variant of coronavirus hit demand and supply-chain constraints pushed input costs to a more than two-decade high.

London's blue-chip FTSE 100 indexes were lagged regional indexes with a 0.5% rise ahead of the Bank of England's decision.

The central bank is expected to raise interest rates as it approaches the end of its 895 billion pound $1.22 trillion asset purchase programme.

On Wednesday, the Federal Reserve announced it would likely begin decreasing its monthly bond purchases as soon as November and signalled interest rate increases may follow more rapidly than anticipated.

Boosting the automotive industry, French car parts company Faurecia rose 6.4% as a sharp cut in global automotive production outweighed strong cash flow targets during 2021 due to a weak 20% reduction in auto production.

Rivals Valeo gained 5.4% and Continental gained 4.4% after a recent bout of weakness in the sector.

Valneva fell about 10% after it said it was expanding trials of a COVID 19 vaccine candidate and remains in talks with the European Commission over a potential contract.