Europe Markets

European markets eke out gains at close as ECB holds interest rates; Akzo Nobel up 12.9%

European markets closed slightly higher on Thursday after the European Central Bank said it was keeping its rates unchanged and vowed to carry on with its asset-purchasing program.

The pan-European Stoxx 600 ended 0.08 percent higher with most sectors in positive territory and major bourses mixed. Insurance stocks were among the best performers on earnings news. Aviva ended close to the top of the STOXX 600, up by 6.4 percent, after announcing a strong full-year operating profit.

Basic resources, by contrast, slumped more than 3 percent by Thursday's close, on soft consumer price data in China and a weakening of the yuan.

The oil and gas sector was also down by 1.5 percent after another drop in oil prices. This came after data from the Energy Information Administration showed inventories rose by 8.2 million barrels last week. Brent crude dropped 2.2 percent to $51.91 a barrel and WTI fell 2.41 percent to $49.07 a barrel.

At the top of the European benchmark was Akzo Nobel, the Dutch paints and chemicals maker rejected a $22 billion offer from a U.S. firm on Thursday. Its shares ended 12.9 percent higher on the news. The French publisher Lagardere jumped 10.25 percent after posting a 13.5 percent increase in earning before interest and tax.

Domino's sank 13.1 percent with the pizza group announcing an expansion in the Norwegian market and an intention to open 80 new stores in the U.K. It also stated Thursday that its full-year profit rose 17 percent in 2016.

Meanwhile, in the U.S., the Dow Jones industrial average and broader S&P 500 continued slightly higher ahead of a probable interest rate hike next week.

ECB keeps rates and stimulus unchanged

After solid U.S. jobs figures released Wednesday, expectations of a rate hike by the U.S. Federal Reserve next week have become even stronger.

However, the main focus in Europe was on the European Central Bank. The bank kept rates unchanged on Thursday and promised to keep its massive stimulus program.

The bank also revised its inflation forecasts upwards. It sees headline inflation at 1.6 percent at the end of 2018 compared to the 1.5 percent projected last December. In terms of growth, the bank has also revised its forecasts upwards for this year from 1.7 percent to 1.8 percent. However, it called on all euro area countries to step up reforms to ensure stable growth.

European Central Bank President Mario Draghi declared the euro "irrevocable" at Thursday's press conference ahead of key elections this summer. As a consequence, German 10-year bond yields spiked to hit a one-month high of 0.43 percent and the euro hit session high of $1.0605.

In corporate news, the Danish firm Novo Nordisk has begun talks with Global Blood Therapeutics, a U.S. company, for a potential acquisition, Reuters reported. Rio Tinto's chairman Jan du Plessis has said he will step down in the coming year after more than eight years in the job.

On the data front, Greece's unemployment rate fell to 23.1 percent in December from 24.1 percent for the same time in 2015. Elsewhere, European leaders are gathering in Brussels for a two-day summit.

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