BRUSSELS (Alliance News) - European stocks rallied on Thursday after European Central Bank President Mario Draghi hinted at possible stimulus.
The ECB decided to maintain the main refinancing rate unchanged at a record low 0.25%, for the sixth month in a row.
However, deflation risks may compel the ECB to use "unconventional instruments" to jumpstart the region's economy in June, Draghi said.
The euro weakened on the dovish comments, helping exporters fearing an overly strong currency.
Meanwhile, concerns about more violence in Ukraine eased somewhat, but the Pentagon said there is no evidence of any troop withdrawals from its shared border with Ukraine, as Russian President Vladimir Putin claimed yesterday.
Pro-Russian separatists also vowed to go through with a referendum on sovereignty this weekend, in defience of the Kremlin's supposed objections.
The Euro Stoxx 50 index of eurozone bluechip stocks surged higher by 1.3%, and is up 3% year-to-date.
Around Europe, The German DAX rose 0.8%, France's CAC 40 jumped 1.3% and the UK'sFTSE 100 added 0.5%.
British banks were in focus, with Barclays shares jumping more than 8% after the company announced 12,000 job cuts.
Standard Chartered PLC. rose 2% as the lender reported a high single digit percentage decline in the group's first-quarter operating profit, in line with expectations.
Prudential PLC shares were up 1% in London after the insurer reported a 29% increase in first-quarter new business profit.
Metro AG shares gained 4% in Frankfurt after the country's largest retailer confirmed its outlook for financial year 2013/14.
Deutsche Telekom was up fractionally. The telecommunications company reported a drop in first-quarter core earnings despite an 8% rise in revenues.
Vivendi SA shares were down 0.3%. The French media and telecom giant announced that all the conditions precedent to the sale of its 53% shareholding in Maroc Telecom to Etisalat have now been fulfilled.
Alstom shares lost 0.3%. Toshiba Corp plans to buy its power grid business for an estimated several hundred billion yen if General Electric Co completes its acquisition of Alstom's energy business, the Nikkei newspaper reported.