- ECB keeps policy unchanged
- BoE maintains policy
- Crimea votes to join Russia
- US jobless claims fall
FTSE 100: 0.19%
CAC 40: 0.59%
FTSE MIB: 0.39%
IBEX 35: 0.85%
Stoxx 600: 0.07%
European stocks jumped after the European Central Bank (ECB) decided to hold fire on policy action.
The ECB today announced it would keep interest rates at 0.25%, despite pressure from the International Monetary Fund to cut the benchmark policy rate to tackle low inflation and high unemployment. Inflation is currently at 0.8% while unemployment remains at a 12% high.
The IMF had also urged the ECB to either inject more liquidity into the banking system via its Long-Term Refinancing Operations (LTRO) or start public and private asset purchases.
Dr.Howard Archer at IHS Global Insight today said: "We strongly suspect that quantitative easing will prove to be too controversial a policy within the Governing Council to get adopted, even if the ECB ultimately decodes that further stimulus is necessary."
ECB President Mario Draghi defended the Bank's decision to maintain policy, which he said "will stay in place even after we see improvements in the economy because we have a stock of slack".
He also reiterated expectations that the euro-area will experience a "prolonged period of low inflation" before gradually moving towards the ECB's target of close to but below 2%.
Draghi said low energy prices and the effect of foreign exchange
movements were partly to blame for the dip in inflation.
The euro strengthened to a two-month high against the dollar
on Draghi's remarks. The euro rose by 0.82% to $1.3846.
Draghi also noted the escalating geopolitical crisis in Ukraine but said the impact on Eurozone markets remains to be seen.
He said the political turmoil between Ukraine and Russia would likely thwart the economies of the two nations but it was too early to tell whether it would hurt other European regions.
The Crimean parliament voted unanimously to join Russia today as tensions in the Ukraine continued to escalate.
The Ukraine's Russian-backed region has set a referendum for March 16th.
European Union leaders had called an emergency meeting to consider the repercussions on Russia over military intervention in Ukraine after Moscow turned down Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases.
BoE keeps policy unchanged
The Bank of England decided today to maintain its policy by keeping interest rates at 0.5% and asset purchases at £375bn, as expected.
Last year the BoE vowed to keep interest rates low until unemployment falls to 7%. However, a sooner-than-anticipated drop towards the threshold prompted Governor Mark Carney last month to change the forward guidance to include a wider range of indicators including spare capacity in the economy.
US jobless claims fall less than forecast
Initial weekly US unemployment claims dropped by 26,000 to 323,000, well below the consensus forecast for a fall to 335,000.
The report comes a day ahead of the Labor Department's non-farm payrolls data which is expected to show US employers added 15,000 jobs in February, compared to 113,000 a month earlier.
In other US data today, factory orders declined by 0.7% in January, worse than the 0.5% drop predicted by analysts. December's drop was revised lower to 2%, from a 1.5% fall previously.
Bouygues gained after the company put in a bid for Vivendi's French phone unit SFR.
Balfour Beatty slumped as the UK construction company posted 2013 sales that missed market forecasts.
Orange surged after the French phone forecast 2014 earnings that exceeded market expectations.
Aggreko rallied as the power generation company said it will give shareholders an extra £200m after reporting 2013 profit that beat analysts' expecations.
Deutsche Telekom declined after Chief Executive Timotheus Hoettges said a sale of the T-Mobile US unit is less likely in the near term.
Schroders jumped as the UK money manager increased its full-year dividend by 35% after posting a 41% rise in 2013 pre-tax profit to £507.8m.
Gemalto advanced as the maker of security chips and software predicted "double-digit expansion" of profit from operations and revenue at constant exchange rates
Bureau Veritas was up after the French goods-inspection company said sales and profitability will increase this year.
Brent crude futures dropped $0.065 to $107.700 per barrel, according to the ICE.