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European Stocks Rise On ECB Action, DAX Breaches 10,000

June 5, 2014

BRUSSELS (Alliance News) - European stocks were higher on Thursday, with German shares briefly rising to all-time highs after the European Central Bank cut interest rates to negative territory on Thursday

ECB President Mario Draghi said the bank is not over with action in its battle against sticky low inflation and stands ready to take non-standard measures in including asset purchases, if required.

"The key ECB interest rates will remain at present levels for an extended period of time in view of the current outlook for inflation. This expectation is further underpinned by our decisions today," Draghi said in the introductory statement to his customary post-meeting press conference.

The ECB cut its central refi refinancing rate to 0.15%, from 0.25% previously.

They also lowered the rate at which the central bank pays commercial banks for depositing their unused cash into negative territory for the time, cutting it from zero percent to minus 0.10%.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.10%.

The German DAX picked up 0.20% to 9,946.30, but not before hitting 10,000 for the first time ever.

The UK'sFTSE 100 eased fractionally, while France's CAC 40 jumped 1.03%.

Deutche Bank was the big loser in Germany, dropping 4%.

Henkel was flat. The consumer goods company announced the acquisition of France-based the Spotless Group SAS for 940 million euros.

In the UK, Smith & Nephew rose 2.5% on talks of acquisition by US-based Medtronic.

VP shares rose sharply as the equipment rental company reported higher profit for fiscal 2014 and proposed an increase in final dividend.

ING confirmed the initial public offering of its insurance arm NN Group. The stock was moderately higher in Amsterdam.

Volvo lost 2.8% in Stockholm. UBS cut the stock to ''Sell'' from ''Neutral.''

The Bank of England decided to keep its record-low interest rate intact to reinforce the economic recovery despite seeing signs of overheating in the property market.

The Monetary Policy Committee governed by Mark Carney on Thursday voted to leave the key bank rate unchanged at 0.50% and quantitative easing at GBP 375 billion. The outcome of the two-day rate setting meeting came in line with expectations.

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Source: Alliance News

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