By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets pared advances in
the afternoon on Thursday after European Central Bank President
Mario Draghi offered no fresh easing measures to fight the euro
zone's low inflation.
The Stoxx Europe 600 index moved 0.1% higher to close at 337.28,
after trading as high as 338.90 ahead of Draghi's comments.
Helping drive the benchmark higher, shares of Bouygues SA gained
6.6% after the conglomerate offered 10.5 billion euros ($14.42
billion) to buy control of Vivendi SA's French telecom business
SFR. Vivendi shares added 0.9%.
Shares of Aviva PLC rallied 8.1% in London after the insurer
said adjusted operating profit increased 6% in 2013 as the value of
new business rose.
Shares of Aggreko PLC jumped 3.5% after the temporary-power
provider said it will return 200 million pounds ($333.76 million)
to shareholders and raised its dividend by 10% after cutting
debt.
Shares of Logitech International SA added 3.9% after the
computer-accessories maker raised its earnings guidance and
launched a $250 million share-buyback.
On a more downbeat note, shares of Balfour Beatty PLC slid 7.4%
after the infrastructure firm said difficult market conditions in
the U.K. and a significant downturn in the Australian
mining-and-resource sector led to a "disappointing financial
performance" in 2013.
More broadly, investors focused on central bank meetings. The
European Central Bank left its main refinancing rate unchanged at a
record low of 0.25% and kept the deposit rate at 0%. Some
economists had expected the central bank to either cut rates or
reveal other easing measures, such as ending SMP sterilization, but
ECB President Mario Draghi didn't indicate that the Governing
Council is itching to loosen monetary policy further.
"In the end, the ECB's March policy meeting seems a bit of a
damp squib with no move on interest rates or liquidity, and no
strong indication that it feels action is necessary as things
stand," said Howard Archer, chief U.K. and European economist at
IHS Global Insight in emailed comments.
This view also dampened the upbeat sentiment in the stocks
market, with European equities coming off their intraday highs,
although the euro (EURUSD) rose to a 2014-high against the dollar
at $1.3847, up from $1.3731 late Wednesday.
Declining inflation in the euro zone has in recent months
sparked fears of actual deflation, adding pressure on the ECB to
take action. Draghi, however, said at the press conference that
medium-term inflation expectations remain well anchored and that
growth in consumer prices should gradually move to the ECB target
of just below 2%. ECB staff project inflation to reach 1.7% by the
fourth quarter of 2016, Draghi said.
Should consumer prices fail to pick up, Archer from IHS Global
Insight pointed out that there "remains a very real possibility"
that the ECB could take further easing action.
"The fact that euro-zone consumer price inflation was still only
0.8% in February after falling to a four-year low of 0.7% in
October means that this very low inflation rate cannot be seen as a
temporary phenomenon," he said.
The Bank of England also met on Thursday and -- as expected --
kept its interest rate a record low of 0.5% and made no change to
its 375 billion ($627 billion) quantitative-easing program. Read:
Happy birthday, QE: 6 charts on U.K's 5-year recovery
Among country-specific indexes, France's CAC 40 index gained
0.6% to 4,417.04, buoyed by the gains for Bouygues. Germany's DAX
30 index closed marginally higher at 9,542.87, and the U.K.'s FTSE
100 index advanced 0.2% to 6,788.49.
In the U.S., data showed weekly jobless claims showed a
larger-than-expected drop in the week ended March 1. The number of
people who applied for U.S. unemployment benefits fell by 26,000 to
323,000 in the week ended March 1, marking the lowest level since
late November.
U.S. stocks traded higher on Wall Street.
More must-reads from MarketWatch:
Where have all the shorts gone?
Polar Vortex set to slow February sales
Bernanke's $250,000 fee for speech puts him near top of food
chain
Subscribe to WSJ: http://online.wsj.com?mod=djnwires