Europe close: Equities gain ground as Draghi calls for European banking union

European stocks rose on Wednesday as investors analysed a speech by European Central Bank president Mario Draghi.

The benchmark Stoxx Europe 600 index closed up 0.65%, while Germany’s DAX gained 0.70% and France’s CAC 40 rose 0.82%.

As of 1639 GMT, the euro was broadly flat against the dollar but declined 0.45% and 0.11% against the pound and the yen respectively, while Brent crude tumbled 2.79% to $46.15 a barrel.

Speaking in London, the ECB said the Eurozone's banking union needed to be complemented by a deposit insurance scheme encompassing all the 19 countries.

“By expressing his wish for a European banking union did little to satisfy markets craving more talk of easy money,” said CMC Markets’ analyst Jasper Lawler.

On an extremely quiet day in terms of economic data on both sides of the Atlantic, investors digested data releases from China.

Industrial production there slowed to 5.6% year-on-year in October from 5.7% in September a touch weaker than expected. Retail sales, meanwhile, were up 11% on the year in October compared with a 10.9% increase in September and with analysts’ expectations for an unchanged reading.

“Coming in the week that Chinese trade data fell once more, the importance of domestic consumption should not be understated for its role in pulling the Chinese economy out of this slowdown,” said IG’s market analyst Joshua Mahony.

SABMiller and AB InBev toast mega-merger

In company news, Anheuser Busch-InBev confirmed it has made a formal offer to buy London-listed rival SABMiller for £44 a share in cash, lifting the stocks 2.16% and 1.83% respectively.

Danish brewer Carlsberg rallied 17.7% as investors welcomed its decision to cut staff by 15% as it looks to return to growth. The company also said it would book $1.4bn in impairment and restructuring costs.

E.ON shares slid 0.35% after the company posted a wider-than-expected loss for the third quarter, while Henkel surged 7.05% as it lifted its earnings per share forecast and reported a rise in quarterly profit.

UniCredit shed 0.08% after revealing it was planning to cut 18,200 full-time staff, as part of a new strategic plan aimed at cutting administrative expenses by 2018 and the exit of its retail banking operations in Austria and its leasing unit in Italy.

Media group Vivendi tumbled 5.84% after its results for the first nine months of the year fell short of analysts’ expectations.