By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks climbed but the euro
sank to a more than one-year low Thursday after the European
Central Bank opted to cut interest rates as part of the battle
against low inflation in the euro zone.
ECB decision: Policy makers at the central bank cut three key
interest rates by 0.1% percentage point each. The refinancing rate
was lowered to 0.05%, the marginal lending rate to 0.3% and the
rate on the deposit facility to negative 0.2%. The ECB made no
comment on new quantitative-easing measures. ECB President Mario
Draghi will hold his regular news conference at 1:30 p.m. London
time, or 8:30 a.m. Eastern.
Market reaction: The euro (EURUSD)dropped against the U.S.
dollar, trading below the $1.31 level for the first time since July
2013, according to FactSet data. The shared currency bought $1.3033
compared with $1.3132 on Wednesday.
The Stoxx Europe 600 rose 0.7% to 347.63, touching intraday
highs after the ECB rate decision. The benchmark turned higher
early in afternoon trade following a Reuters report the European
Central Bank was considering plans to launch an asset-backed
securities program worth up to 500 billion euros ($637
billion).
Investors will watch Draghi's press conference for any news that
he and his colleagues will launch full-scale quantitative easing,
but other options are available, such as a "private QE" program,
say economists.
Among movers on the Stoxx Europe 600, Standard Life headed
advancers on the benchmark, surging 7.7% on the insurer's plan to
return 1.75 billion pounds ($2.88 billion) to investors as the
company agreed to sell its Canadian assets to Manulife Financial
.
Bilfinger SE shares were the worst performers, falling 9.3%
after the German construction and services company issued a warning
on profit for the third time in three months.
On the country indexes, Germany's DAX 30 index turned higher by
0.4% to 9,661, and France's CAC 40 rose 1% to 4,466. The U.K.'s
FTSE 100 picked up 0.2% to 6,883. The Bank of England on Thursday
held its key interest rate at 0.5%, as expected.
The Stoxx 600 on Wednesday climbed 0.7% after Russian President
Vladimir Putin said he and Ukrainian President Petro Poroshenko
agreed to the outlines of a cease-fire plan between Kiev's forces
and pro-Russian separatists fighting in eastern Ukraine. Further
talks will be held Friday.
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