Frankfurt - European stocks stormed out of the gate Wednesday after hopes of lower interest rates led to a surge in shares across Asia and on Wall Street.

Amid expectations of the US Federal Reserve delivering another hefty cut in borrowing costs Wednesday, Europe's blue-chip Stoxx 50 rose 6.5 per cent to 2,191 in early trading.

This was reflected across national bourses with shares in London gaining more than 5 per cent and Paris jumping 6.5 per cent as the morning session got under way. Stocks in Zurich were up 4.4 per cent.

In addition the European Central Bank is expected to cut the cost of money at its meeting set down for next week.

The oil price also rebounded on the global share rally with the price oil jumping by 3 per cent to 64.67 dollars as the European trading day got under way.

Shares in Frankfurt, however, tumbled by more than 6 per cent in opening trade after luxury sports carmaker Porsche AG announced that it was moving to stabilize shares in Volkswagen AG.

In a statement Porsche said that depending on the state of the market it planned "to settle hedging transactions in the amount of up to 5 per cent of ordinary Volkswagen shares."

The news that Porsche wanted to build its stake in Volkswagen to 74.1 per cent have sent VW shares soaring this week and consequently helped to power ahead Frankfurt's key DAX index.

But after Volkswagen's shares jumped by 146 per cent in one day this week, Porsche's announcement Wednesday resulted in the VW share price dropping 36.5 per cent to 600 euros (762.24 dollars) in early trading. (dpa)