European stocks rose after unexpected ECB meeting

European stocks rose on Wednesday, with banks leading the gains after the European Central Bank said its rate-setting Governing Council would hold an unscheduled meeting to discuss the recent sell-off in government bond markets.

The Eurozone stock index rose 1.5%, while the pan-European STOXX 600 added 1%.

Italian bank stocks, which were recently pulled down by worries about the rising cost of Rome’s debt, rose as government bond yields fell.

Shares of Unicredit, Intesa Sanpaolo and BPER Banca climbed to 5.6% from 4.3%, while the broader Italian banking index went up on 5%.

Earn on the moving markets and trade Italian stocks with Top Forex brokers

Eurozone bank shares fell sharply last week as southern European bond markets sold off after the ECB said last week it saw no need for a new tool to help weaker economies cope with rising borrowing costs.

An unexpected ECB meeting has been scheduled for 09:00 GMT, but it is not yet clear if a statement will be released, several sources said.

“The fact that the ECB is now stepping up to address the matter is a positive thing,” said Charalambos Pissouros, head of research at JFD Brokers.

“However, if there aren’t any important details delivered today, we see the case for the massive selling in bonds to continue.”

The Federal Reserve will release its policy decision at 18:00 GMT and most traders are expecting a larger 75 basis point rate hike after last week’s strong US inflation.

On Tuesday, the STOXX 600 fell for a sixth consecutive session, delayed by nearly three months on fears that aggressive US rate hikes would push the world’s largest economy into recession.

Rapidly rising inflation, a slowdown in the Chinese economy and the conflict in Ukraine have soured the outlook for the global and European economies, sending the STOXX 600 index down about 16% this year.

Shares in Swedish medical device maker Getinge fell 15.5%.

Shares of H&M, the world’s second largest fashion retailer, fell 4.4% despite stronger-than-expected quarterly sales growth.