LONDON, July 21 Reuters The euro, government bonds yields and bank shares in the single currency bloc rose on Thursday after the European Central Bank delivered a big 50 basis point rate hike to tame inflation in its first rate increase since 2011.

The ECB raised its benchmark deposit rate to zero percent, breaking its own guidance for a 25 basis point move as it joined global peers in jacking up borrowing costs and ending an eightyear experiment with negative interest rates.

The euro climbed to 1.0268 , about 0.7 higher than the 1.0198 it was trading at ahead of the ECB39;s statement. By 1312 GMT it had given up most of those gains.

Benchmark 10year euro area government bond yields were broadly higher, with Germany39;s 10year Bund yield up 10 basis points on the day at 1.36 .

Twoyear German yields, more sensitive to shortterm interest rate moves, rose 14 bps to 0.76 .

The market was not by any means fully priced for this development and you can see that reflected in the very sharp rise in shortdated German yields on the back of today39;s move, said Richard McGuire, head of rates strategy at Rabobank.

The ECB had previously flagged a 25 basis point move at its July meeting, but sources told Reuters earlier this week that its Governing Council was consider the bigger 50 bps hike.

The panEuropean STOXX 600 index struggled for direction, briefly falling after the ECB decision before flattening. Euro zone banks jumped 1 with the ECB39;s end of negativerates seen…