European Equity Benchmarks Close Higher; Bank of England Holds Rates, Europe Inflation Rises 2%

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The broad-based major European indices closed higher in Thursday's trading session, as mining stocks help lift the markets for the second day in a row.

In economic news, euro area annual inflation was 2.0% in February, up from 1.8% in January, and compared to -0.2% for February of 2016, reports Eurostat, the statistical office of the European Union. European Union annual inflation was 1.9% in February, up from 1.7% in January, and -0.1% for January of 2016.

The lowest annual rates for February were registered in Ireland (0.3%), Romania (0.5%), Bulgaria and Denmark (both 0.9%). The highest annual rates were recorded in Estonia (3.4%), Belgium (3.3%), Latvia and Lithuania (both 3.2%). Compared with January 2017, annual inflation fell in three member states and rose in 24.

In the U.K., the Bank of England's Monetary Policy Committee voted 8-1 to maintain the bank rate at 0.25%. The Bank also voted unanimously to continue with the program of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, totaling up to GBP10 billion ($12.36 billion).

"The Committee expects a slowdown in aggregate demand over the course of this year, as household demand growth declines in reaction to lower real income growth," said the Bank in a statement.

The move sent the pound sharply higher, rising 0.63% to $1.23650

In Germany, there was a surge in home construction in 2016 as the construction of a total of 375,400 dwellings was permitted in Germany in 2016, according to the Federal Statistical Office (Destatis). That is an increase of 21.6% or 66,700 dwellings from 2015.

In equities, surging mining stocks led the FTSE higher for the second consecutive session as as Anglo American, Glencore International, and Antofagasta climbed 8.3%, 4.4%, and 4.2% respectively. Fresnillo, Rio Tinto, BHP Billiton, and Randgold Resources gained 3.5%, 3.1%, 2.7%, and 2.4%.

In Frankfurt, Deutsche Lufthansa led the DAX higher, rising 5.5% after the airline said it expects significantly higher revenue in 2017. Postal services firm Deutsche Post, footwear and apparel retailer Adidas, and bank Commerzbank gained 1.9%, 1.8%, and 1.7% respectively.

And in Paris, commercial real estate company Unibail Rodamco led the CAC into positive territory, rising 2.5%, as did shopping center operator Klepierre, and steel and mining company ArcelorMittal, each of which also gained 2.5%. Luxury goods company Kering, and auto parts supplier Valeo, each closed 1.6% higher, while telecommunications operator Orange closed 1.5% higher.

The FTSE gained 0.64%, the DAX climbed 0.61%, and the CAC-40 rose 0.56%.

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Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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