By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets pared gains on Thursday after the European Central Bank kept rates on hold as expected, while Spanish stocks rose after a successful debt sale.
The Bank of England also kept rates on hold as expected.
The Stoxx Europe 600 index XX:SXXP +0.17% traded 0.2% higher at 293.99, after losing 0.3% on Wednesday.
Shares of Aggreko PLC UK:AGK +13.67% rallied 14%, after the temporary-power provider reported a rise in full-year pretax profit and affirmed the outlook for 2013. See: Aggreko '12 year pretax net up; outlook affirmed
Shares of heavyweight Nestle SA CH:NESN +1.13% NSRGY -1.51% added 1.2%, after Credit Suisse lifted the Kit Kat producer to outperform from neutral.
On a more downbeat note, shares of U.K. insurer Aviva PLC UK:AV -11.62% sank 12%. The firm reported a total loss after tax of 3.05 billion pounds ($4.59 billion) and cut its full-year dividend to 19 pence from 26 pence. See: Aviva '12 operating net off 10%; dividend reduced
For the broader European stock markets, the focus turned to central banks. The ECB kept rates unchanged at 0.75% as was widely expected, with investors now looking toward ECB President Mario Draghi’s news conference scheduled to begin at 8:30 a.m. Eastern. See: ECB policy unchanged; Draghi faces Italy questions
Analysts at Danske Bank said in a note that Draghi “will open the door at the press conference for a rate cut in the coming months.”
“This cut is not likely to materialize, though, given the improvement in economic data. The ECB’s staff projections are likely to remain almost unchanged. The inflation outlook might be revised down slightly, which gives the ECB further room for rate cuts,” they added.
The U.K. central bank kept rates on hold at 0.5% and made no changes to its quantitative easing program.
Investors also trained their attention on Spain, where the government successfully sold its maximum targeted 5 billion euros ($6.5 billion) in public debt at lower borrowing costs than at a previous auction, according to media reports. In the secondary market, the yield on 10-year Spanish government paper ES:10YR_ESP -1.45% fell 9 basis points to 4.91%, according to electronic trading platform Tradeweb.
The IBEX 35 index XX:IBEX +0.61% gained 0.6% to 8,407.50, with BBVA SA ES:BBVA +0.79% BBVA -0.10% up 0.5% and Banco Santander SA ES:SAN +0.68% SAN -0.92% up 0.6%.
Among other notable movers in Europe, IMI PLC UK:IMI +5.71% rose 5.4%. The engineering group declared an 8% increase in its full-year dividend and said it plans to buy back 175 million pounds ($263.64 million) of its stock over the next 12 months. See: IMI '12 pretax net up; payout lifted; buyback set
The FTSE 100 index UK:UKX +0.19% traded 0.2% higher at 6,442.90. See: Aggreko leads U.K. stocks higher; Aviva sinks
In Germany, the DAX 30 index DX:DAX +0.24% gained 0.2% to 7,935.90. Shares of Adidas AG DE:ADS +5.02% jumped 5.7% after the sportswear and apparel maker said it sees higher sales and earnings in 2013. See: Adidas hurt by Reebok charges; sales seen rising
Shares of SAP AG DE:SAP +0.92% rose 0.8%, as HSBC lifted the software firm to overweight from neutral.
And in France, the CAC 40 index FR:PX1 +0.44% gained 0.4% to 3,789.56.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
