German industry data improves

By Marc Jones and Brian Rohan

FRANKFURT/BERLIN (Reuters) - The European Central Bank cut interest rates to a record low of 1.0 percent on Thursday, giving shares another reason to rise as German data gave further evidence the downturn is bottoming out.

With central banks still battling recession, the Bank of England increased the size of its asset purchase programme by 50 billion pounds as it left interest rates at a record low of 0.5 percent for a second month.

Markets were also looking ahead to results of U.S. government-inspired health checks or "stress tests" on 19 leading U.S. banks, due later in the day and set to show more than half in need of billions of dollars in extra capital.

But U.S. Treasury Secretary Timothy Geithner said no U.S. banks screened by regulators face the risk of insolvency and also said the pace of the U.S. economic decline was slowing, even as the economy faced enormous uncertainty.

"There are some places where we're seeing things starting to improve, but the main thing is a sense of stability," Geithner said.

The pan-European FTSEurofirst 300 index of top shares jumped to a four-month high, with banks leading the advance.

In Germany a surge in foreign demand unexpectedly pushed manufacturing orders 3.3 percent higher in March, their first increase in seven months.

"Today's number offers some relief for a battered industry," said Carsten Brzeski at ING Financial Markets. "The car scrap scheme and some new foreign orders indicate the free fall has come to an end and give hope that the worst might be over."