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Europe Stocks Pare Losses to Close Up After Draghi Speech

European shares rebounded to a higher close on Thursday, paring losses from when ECB President Mario Draghi confirmed the central bank would not deliver any extra stimulus. The pan-European FTSEurofirst 300 Index unofficially closed 0.5 percent higher at 1,207.40 points.

(Read More: Draghi Confesses to Pope: We Are Frustrated Too)

As expected, the ECB knocked down its key rate by a quarter-point to 0.50 percent, the first rate cut since July 2012. ECB chief Mario Draghi added that the monetary stance will remain accommodative for "as long as is needed."

Draghi told reporters at a press conference following the rate cut announcement that inflation could remain subject to some volatility throughout the year. "Overall, euro area economic activity should stabilize and recover gradually in the second half of the year."

(Read More: 'Inevitable' ECB Rate Cut Fails to Impress Markets)

"It is unlikely that the trimming of interest rates from 0.75 percent to 0.50 percent will have a major growth impact, especially given fragmented credit markets," Howard Archer, an economist at IHS Global Insight, said in a research note.

"But any potential help to the euro zone economy in its current state is worthwhile, and a move is certainly justified by consumer price inflation at just 1.2 percent in April."

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Price
 
Change
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FTSE
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DAX
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CAC 40
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IBEX 35
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Earlier in the day, PMI (Purchasing Managers' Index) data was released, showing a continued contraction in euro zone manufacturing. The numbers followed disappointing manufacturing numbers from China, which indicated that sluggish demand from Europe and the U.S. was weighing on Chinese exports.

(Read More: Euro Zone Factory Downturn Deepens in April)

Shell Earnings Beat; CEO to Retire

In earnings news, shares in Infineon closed around 10 percent higher and topped both the STOXX 600 and the German Dax, after the chipmaker upgraded its 2013 outlook, due to better-than-expected auto orders.

Royal Dutch Shell reported first earnings that beat expectations on Thursday, and its chief executive Peter Voser announced he would retire in 2014. Adjusted net profit hit $7.5 billion, compared with forecasts of $6.5 billion.

(Read More: Shell Boss to Retire Next Year as Earnings Beat)

Glencore-Xstrata Takeover Goes Through

In non-earnings stock news, Glencore finally completed its $30 billion purchase of Xstrata, the mining industry's biggest takeover yet. Glencore shares topped the FTSE 100 on Thursday, closing up around 5.6 percent. The European basic resources sector as a whole got a boost, closing nearly 1.5 percent higher.

Meanwhile, UBS shareholder Knight Vinke Asset Management called for the Swiss bank to separate its wealth management division from its investment banking, to salvage its battered reputation.

(Read More: Activist Investor Knight Calls for UBS Break Up)