European equities climbed the most since November 2008, clawing back almost two-thirds of losses from Thursday’s record slump, as policymakers stepped up their response to the economic fallout from the virus.

The Stoxx 600 Index rallied as much as 8.8% after Germany pledged to spend “billions” to help the country’s companies and workers cope with the effect of the virus. Optimism the U.S. is close to agreeing on an aid bill and signs the European Central Bank is ready to buy more debt of nations including Italy also boosted market sentiment.

The Italian FTSE MIB Index jumped a record 18%, while Germany’s DAX Index rallied the most since December 2008. All 19 Stoxx 600 industry groups climbed 5% or more, with carmakers and miners leading gains, up at least 11%.

“As monetary policy obviously reaches the limits of effectiveness, it can still mitigate risks but fiscal policy is the new weapon of choice,” Frederik Hildner, a portfolio manager at Salm-Salm & Partner, said by phone. “It will be reassuring for markets to see early and decisive measures like in Germany in more countries or even worldwide.”

European stocks plummeted 11% on Thursday, after a U.S. travel ban and an underwhelming ECB response did little to calm investors seeking a strong, coordinated response to deal with the pandemic’s impact on global growth.

Indications from Germany that it will abandon its long-standing balanced-budget policy if necessary added to signs of boosted sentiment a day later, while a European Union executive said the bloc is ready to trigger a crisis clause allowing fiscal stimulus. In the U.S., House Speaker Nancy Pelosi said she’s near an agreement with the Trump administration on a bill to mitigate the impact from the virus.

“A broken taboo and a clear sign in the right direction from Germany with this announcement,” said TFS Derivatives strategist Stephane Ekolo, referring to the country’s willingness to introduce fiscal stimulus. “Now is the time for a coordinated response from the EU.”

Among notable movers, Roche Holding AG jumped 10% after the Swiss drugmaker won approval from the U.S. government for a highly automated coronavirus test.

--With assistance from Kit Rees and Michael Msika.

This article was provided by Bloomberg News.