By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rose for a second
straight day on Thursday as European Central Bank President Mario
Draghi reassured investors that the bank stands ready to launch
more stimulus measures to fight off low inflation and boost
growth.
Dovish Draghi: In an interview with Lithuanian business
publication Verslo Zinios, the ECB boss reiterated the central bank
will "use additional unconventional instruments within our mandate"
if necessary to combat a "too prolonged period of low inflation."
Economists expect the "unconventional" stimulus measures could be a
full-scale quantitative-easing program.
The comments also echoed remarks Draghi made in the European
Parliament on Monday.
The ECB meets next Thursday, but after announcing a rate cut and
a "mini" QE package at the September meeting, the central bank is
likely to keep monetary policy on hold in October.
Market reaction: Stock markets added to gains from Wednesday,
when another lackluster data-set out of Germany, heightened
expectations the ECB may take more aggressive steps to invigorate
the sluggish eurozone economy.
The Stoxx Europe 600 index rose 0.3% to 345.47 on Thursday. Also
reacting to Draghi's dovish comments, the euro (EURUSD) against the
dollar, trading at $1.2713, from $1.2780 late Wednesday in New
York.
"The prospect that further ECB action will eventually occur is
likely to maintain downward pressure on the euro," said Howard
Archer, chief U.K. and European economist at IHS Global Insight, in
a note. "This is clearly helpful for eurozone growth prospects and
a development that the ECB is far from unhappy to see."
Germany's DAX 30 index put on 0.3% to 9,692.10, while France's
CAC 40 index gained 0.2% to 4,423.96. The U.K.'s FTSE 100 index ,
however, slipped 0.1% to 6,699.97.
Major movers: Shares of Hennes & Mauritz AB slid 3.6% after
the Swedish fashion retailer said sales in the fiscal fourth
quarter got off to a slow start.
Air France-KLM rose 2.8% after the airline said it has given up
on plans to expand its Transavia low-cost airline across Europe, in
a bid to halt a strike by its French pilots. Read about more about
European stock movers.
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