By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks rose Wednesday, gaining on the possibility that the European Central Bank will enact further stimulus measures.

The Stoxx Europe 600 index advanced 0.7% to 330.93, its best close in two weeks, as banking, auto makers and oil issues bounced up. Intesa Sanpaolo SpA advanced 1.5%, Daimler AG tacked on 2.8% and French oil company Total SA (TOT) ended up 1.5%.

Equity trading closed just ahead of expected remarks by U.S. President Barack Obama in Brussels about U.S.-European relations.

ECB officials on Tuesday indicated they were considering stepping-up a battle against low inflation. Bank of Finland Governor Erkki Liikanen said the bank hasn't "exhausted out maneuvering room," on interest rates, adding that a negative deposit rate and additional loans to banks are among the tools it may use. Meanwhile, Bundesbank President Jens Weidmann told MNI that it also hasn't tabled the idea of large-scale asset purchases, or quantitative easing.

Traders were "latching onto the positives and the prospects of policy easing in the euro zone," particularly after Weidmann, "known as a hawk among the ECB" indicated he was open to purchasing government bonds, said Ishaq Siddiqi, market strategist at ETX Capital, to clients.

The ECB talk comes as the U.S. Federal Reserve has been reducing the pace of its own stimulus effort of purchasing government debt each month.

The Stoxx Europe 600 added to Tuesday's jump of 1.3%, where gains were in part spurred after a gauge of U.S. consumer confidence surged to a more than six-year high.

European stocks stayed higher after U.S. figures showed durable-goods orders rose 2.2% last month, but the Commerce Department's report underscored widespread weakness in the world's largest economy, including in business investment. The S&P 500 index(SPX) , however, came off session highs in afternoon trade.

In country-specific indexes, Germany's DAX 30 index rose 1.2% to 9,448.58, with shares of Merck KGaA bid up 1.2% after the chemical and pharmaceutical company said it will propose a 2-for-1 stock split to shareholders in May.

Also in Germany on Wednesday, a report from market-research company GfK showed the consumer mood in Germany held steady, as expected, going into April. Consumers see the outlook improving for the economy, although GfK noted there is uncertainty about how the crisis in Ukraine's Crimea region will affect consumer sentiment.

France's CAC 40 gained 0.9% to 4,385.15, with a 2.4% push higher for Publicis Groupe SA (PUBGY) after the ad agency's chief executive said approval from Chinese officials for a proposed merger with Omnicom Group Inc. (OMC) is "a matter of weeks."

But a stronger advance for the U.K.'s FTSE 100 index was pared to less than one point at 6,605.30. Hitting the index were shares of Lloyds Banking Group PLC (LYG), down 4.9% after the U.K. government said it sold a 7.8% stake in the company.

Standard Life PLC (SL.LN) shares, however, rallied 7% after the company's Standard Life Investments unit agreed to purchase asset manager Ignis from Phoenix Group for 390 million pounds ($645.2 million) in cash.

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