- Draghi signals ECB will maintain monetary support for Eurozone
- Bernanke defends record stimulus in US
- European Commission President confident Italy will honour commitments
FTSE Mibtel 30: 0.60%
Ibex 35: 1.31%
Stoxx 600: 0.97%
The main European indices rose Thursday as fears over a tightening of monetary policy in the bloc were put at ease.
European Central Bank (ECB) President Mario Draghi signalled the bank would maintain its financial support measures with inflation expected to significantly miss its 2.0% target next year.
He said the balance sheet may shrink naturally as confidence returns to financial markets and banks repay emergency loans but lawmakers will not yet exit monetary stimulus.
The ECB has predicted the Eurozone's economy will contract 0.3% this year and inflation will slow to 1.4% in 2014.
"It is clearly too early to pull the carpet as risks are still to the downside," Thomas Costerg, an economist at Standard Chartered Bank in London, told Bloomberg.
Stateside, Federal Reserve Chairman Ben Bernanke defended monetary stimulus to Congress. He said it has helped reduce borrowing costs and spur growth. Bernanke also stood behind the Fed's bond purchases, saying they were vital to boost the weak economy and create jobs.
Italy's next government will honour reforms, says BarrosoAs Italy continues to tackle a way to solve its hung parliament, European Commission President Jose Manuel Barroso said he was confident the country's next government would not hurt Eurozone growth.
Uncertainty remains over who will lead the country after Italian elections resulted in a deadlock.
Centre-left coalition leader Pier Luigi Bersani won the lower house by less than a half a point while former Prime Minister Silvio Berlusconi won a blocking minority in the Senate. An Italian government requires a majority in both houses.
Bersan tried to woo Beppe Grillo, another big player in the political race, to form a coalition but the call was rejected.
While investors have been nervous over the future of the country amid a deficit, Barroso said he believes Italy will honour its commitments.
"One thing for me is clear is that Italy needs stability and a programme that reinforces confidence. I'm completely confident that the Italian government, after this normal procedure of democracy, will keep this path because it is certainly in their interests."
Stocks reacted positively to his comments as Italy's benchmark FTSE MIB edged higher.
fall on annual loss
Royal Bank of Scotland's shares fell after announcing a wider loss after paying fines for the LIBOR scandal and mis-selling of payment protection insurance.
Bayer advanced after saying sales would rise to €41bn this year and revealing fourth-quarter earnings in line with analysts' expectations.
International Consolidated Airlines Group jumped as the European airline company posted a full-year operating loss of €23m, excluding one-time items, much better than its initial guidance.
Telefonica climbed after beating market forecasts in its fourth-quarter earnings report as sales grew in Latin America.
Other asset classes mixed
The euro/dollar fell by 0.46%, to the 1.3078 dollar
Front month Brent crude futures gained by 0.330 dollars to the 112.240 dollar per barrel level on the ICE.