EUROPE MARKETS: Europe Stocks Higher As ECB Stokes Stimulus Hopes

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European market stocks rose Wednesday, gaining on the possibility that the European Central Bank will enact further stimulus measures.

The Stoxx Europe 600 index advanced 0.3% to 329.60, with mining shares up as similar anticipation that China will adopt measures to stabilize the economy helped push prices for copper and other metals higher. Shares of Rio Tinto PLC led the mining sector by rising 1.4%, and BHP Billiton PLC (BHP) tacked on 0.7%.

ECB officials on Tuesday indicated they were considering stepping-up a battle against low inflation. Bank of Finland Governor Erkki Liikanen said the bank hasn't "exhausted out maneuvering room," on interest rates, adding that a negative deposit rate and additional loans to banks are among the tools it may use. Meanwhile, Bundesbank President Jens Weidmann told MNI that it has also hasn't tabled the idea of large-scale asset purchases, or quantitative easing.

Traders were "latching onto the positives and the prospects of policy easing in the euro zone," particularly after Weidmann, "known as a hawk amongst the ECB" indicated he was open to purchasing government bonds, said Ishaq Siddiqi, market strategist at ETX Capital, to clients.

The ECB talk comes as the U.S. Federal Reserve has been reducing the pace of its own stimulus effort of purchasing government debt each month.

The Stoxx Europe 600 added to Tuesday's jump of 1.3%, where gains were in part spurred after a gauge of U.S. consumer confidence surged to a more than six-year high.

In country-specific indexes, Germany's DAX 30 rose 1.1% to 9,441.98, with ThyssenKrupp AG up 2.6%, and Fresenius Medical Care AG riding 1.3% higher. France's CAC 40 gained 1.1% to 4,380.09.

The U.K.'s FTSE 100 index picked up 0.5% to 6,640.12, but the rise was limited in part by a 3.3% loss for Lloyds Banking Group PLC after the U.K. government said it sold a 7.8% stake in the company.

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