- Inflation to remain below one per cent, says ECB's Constancio
- Donetsk and Luhansk back plans to leave Ukraine
- Mining rally boosts stocks

FTSE 100: 0.61%
DAX: 1.47%
CAC 40: 0.78%
FTSE MIB: 0.93%
IBEX 35: 2.12%
Stoxx 600: 0.75%

European stocks rose after European Central Bank (ECB) Vice President Vitor Constancio said inflation will probably stay below one per cent for an extended period, raising hopes of policy action next month.

Speaking at a conference in Vienna on the banking union, Constancio said the medium-term inflation outlook will be a key factor when the ECB considers changing policy amid low consumer prices.

"The burden of servicing the debt and reducing the debt ratio, when nominal (economic) growth is so low, it's a possible cause of drag," he said, according to Reuters.

"We just have to look that since mid-2012 - when inflation was well above 2% in Europe - until now when it is indeed below 1 and very likely will stay below 1% for quite some time, the effect of the appreciation of the euro during this period explains the reduction in a inflation rate by 0.5 percentage points," he added.

ECB policymaker Ewald Nowotny today said an interest rate cut alone would be enough to curb low inflation in the Eurozone. Inflation has held below 1% for seven months in a row.

Ukraine

Ukraine's Donetsk and Luhansk regions have backed plans to separate from the rest of the country, according to RIA Novosti. Governments in Kiev, the US and the European Union (EU) said the referendums were illegal.

The EU has expanded its sanctions in connection to the unrest in Ukraine today to include two companies and 13 people, Bloomberg said, citing an official. Ukraine plans to hold presidential elections on May 25th.

Miners rally

A gauge of miners jumped the most in almost four months after JPMorgan Chase & Co. recommended buying shares in the sector on signs of a recovery in Chinese demand. The broker said Rio Tinto Group and BHP Billiton were the most attractive stocks in mining.

Sky Deutschland advanced after British Sky Broadcasting said it is working on a deal to acquire control of the company.

Alstom gained on news Siemens may offer to transfer its rail-signaling unit to Alstom Transport as part of an improved bid to take over the firm.

Air France-KLM Group climbed after saying the number of passengers carried increased 1.8% in April to 6.7m.

The euro fell 0.01% to $1.3756.

Brent crude futures increased $0.369 to $108.290 per barrel, according to the ICE.

RD

Related share prices