* FTSEurofirst 300 up 0.1 pct, rising for 8th session
* Madrid's IBEX surges after strong Spanish PMIs
* ECB opens door to unconventional measures
By Blaise Robinson
PARIS, April 3 European shares rose on Thursday,
with some benchmark indexes hitting multi-year highs, after the
European Central Bank opened the door for unconventional
measures to thwart the risk of deflation.
Spanish stocks outpaced the broad market after a purchasing
managers' survey for the services sector, which accounts for
about half of Spain's economic output, expanded more than
expected last month, fuelling hopes economic recovery is picking
Spanish banks led the rally, with BBVA jumping 3.6
percent and Banco Popular gaining 3.9 percent. Madrid's
IBEX rose 1.4 percent to 10,584.1 points, a level not
seen in nearly three years.
They were also boosted, along with other euro zone banks, by
comments from ECB President Mario Draghi indicating the central
bank was ready to act to boost inflation if necessary.
"Sooner rather than later we will see the IBEX hitting
11,000 points," said Margarita Rivas, senior investment
strategist at GVC Gaesco Valores, in Madrid.
"Within a few weeks, we've gone from fears of an escalation
in Ukraine to euphoria following Draghi's words, which sounds
disproportionate. But the fact is: people don't want to miss the
rally so there's a strong buying pressure in the market."
The FTSEurofirst 300 index of top European shares
ended 0.1 percent higher at 1,345.18 points, gaining ground for
the eighth consecutive session, its longest winning streak since
The ECB held its main interest rate at a record low of 0.25
percent on Thursday, and Draghi told a news conference that if
low inflation dragged on too long, action would be taken,
marking a significant shift of tone from last month when he
appeared to set quite a high bar to action.
"The Governing Council is unanimous in its commitment to
using also unconventional instruments within its mandate in
order to cope effectively with risks of a too prolonged period
of low inflation," Draghi told a news conference, adding that
printing money - quantitative easing - had been discussed at the
"The message is pretty clear: the ECB is ready to act, they
have all the tools ready, and the fact that they are unanimous
about it is very important. This is quite positive for
equities," said David Thebault, head of quantitative sales
trading at Global Equities, in Paris.
Euro zone banks were among the biggest gainers, with Natixis
up 4.3 percent, UniCredit up 2.8 percent and
Banco Espirito Santo up 3 percent.
The euro zone's blue-chip Euro STOXX 50 index
rose 0.6 percent at 3,206.76 points, a level not seen in 5-1/2
The UK's FTSE 100 index ended 0.2 percent lower,
while Germany's DAX index rose 0.06 percent, France's
CAC 40 was up 0.4 percent, hitting a 5-1/2 year high,
and Italy's FTSE MIB gained 1.4 percent, just shy of a
near three-year high hit in the previous session.
So far this year, the FTSE is down 1.5 percent, the DAX is
up 0.8 percent and the CAC has risen 3.6 percent. In contrast,
the IBEX is up 6.7 percent and the MIB has surged 15.9 percent.
Italy and Spain, which have the largest bond markets in the
euro zone periphery, look set to gain the most from potential
quantitative easing in Europe, but Germany could also benefit as
the euro currency could slip, giving breathing space to German
exporters, said Jonathan Stubbs, head of European equity
strategy at Citi.
"If the ECB puts in place more aggressive easing, then the
DAX will do a bit better. It's one of the countries that has
more FX headwinds than others."
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Alistair Smout; Editing by Susan