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Europe ends on a relatively positive note after Draghi strikes a dovish tone

  • The pan-European Stoxx 600 closed up 0.27 percent on Thursday, with most sectors ending in positive territory.
  • Meanwhile, the European Central Bank (ECB) left rates unchanged on Thursday.
  • Italian automaker Ferrari closed down 6.9 percent, after it had its rating downgraded to "underweight" by Morgan Stanley.

European markets finished trade in the black on Thursday, with investors having spent the latter part of the session digesting the European Central Bank (ECB) latest rate decision and comments.

The pan-European Stoxx 600 closed up 0.27 percent on Thursday, with most sectors ending in positive territory.

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC
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IBEX 35
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In the meantime, the U.K.'s FTSE 100 popped 0.58 percent by the close, while the French CAC rose 0.25 percent and Germany's DAX jumped 0.67 percent. Periphery bourses however ended on a mixed to higher note, with Italy's FTSE MIB closing in the red.

Looking at sectors, autos continued to post solid gains, following on from a strong performance in recent days. The sector, however, came off its highs, closing up 0.44 percent after Italian automaker Ferrari had its rating downgraded to "underweight" by Morgan Stanley. It was the STOXX 600's worst performer, closing down 6.9 percent.

Elsewhere, tech stocks posted solid gains — closing 1.47 percent up as a sector — with AMS and Micro Focus both closing sharply higher, up 6.8 and 5.12 percent respectively.

In individual stocks, Capita sank 2.4 percent as it lowered its underlying operating profit for 2016 after putting new international accounting standards into practice. The business services firm is currently looking for a new chief executive after a flurry of profit warnings.

Wendel was also found near the bottom of the STOXX 600, closing down 3.8 percent, after the investment firm said that its Chairman of the Executive Board, Frederic Lemoine, would leave by the end of 2017.

In banks, Nordea ended in the red after it announced that it would be moving its headquarters to Finland. The bank said it would move away from Sweden, to cut the costs enforced by its domestic regulators.

ECB policy decision

Meantime, the euro slipped from day's high of $1.2059 after the ECB left policy unchanged but pared gains to break $1.20 during Draghi's speech. The single currency has soared more than 14 percent this year, the strongest performance among major currencies.

ECB chief Mario Draghi said the outlook for growth and inflation remains "broadly unchanged." He said expansion has been solid and broad-based across countries and sectors, but underlying inflation remains subdued and this justifies further quantitative easing. However, the president did give investors food for thought, pointing to its October meeting as one to watch.

"This autumn, we will decide on the calibration of our policy instruments beyond the end of the year," Draghi noted, adding later on in the conference that it is likely that the "bulk of the decisions" will be taken during the month of October, rather than suggesting December.

"A tapering of the purchase programme will have to take place from next year due to technical constraints; however it is clear from today's meeting the majority of members on the Governing Council want more time to assess the incoming data to allow the relevant bodies within the bank to formulate plans for a gradual wind down of the programme," Brendan Lardner, active fixed income portfolio manager at State Street Global Advisors, wrote in a note.

Elsewhere, while North Korea tensions and U.S. politics continues to rumble on in the background, U.S. stocks came under pressure on Thursday around Europe's close, with banks leading the declines, with interest rates continuing their downward spin.

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