European stocks rally as ECB holds surprise meeting

European stocks rallied in early trade on Wednesday, after a spokesperson of 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. An index of euro zone shares climbed 1.3% by 0706 GMT, while the pan-European STOXX 600 index added 0.8%.

European stocks rallied in early trade on Wednesday, after a spokesperson of 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.

An index of euro zone shares climbed 1.3% by 0706 GMT, while the pan-European STOXX 600 index added 0.8%. Italian bank stocks, which have taken a hit recently on fears about Rome's surging debt costs, rallied.

Shares of Unicredit, Intesa Sanpaolo and BPER Banca rose between 4.5% and 6.5%, while the broader Italian banking index climbed 6.4%. Eurozone banks have fallen sharply in the past week, hit by a selloff in southern European bond markets after the ECB said last week it saw no need to create a new tool to help weaker economies cope with rising borrowing costs as it ends bond-buying and looks to hike rates.

The ECB's surprise meeting was scheduled for 0900 GMT but it was not yet clear whether a statement would be published, several sources with direct knowledge said.