Europe close: Equities move in tight ranges after Draghi speech

European stocks ended the week on a mixed note, after comments from European Central Bank’s president Mario Draghi failed to improve sentiment.

The benchmark Stoxx Europe 600 index closed up 0.22%, while France’s CAC 40 was down 0.08% and Germany’s DAX gained 0.31%.

As of 1636 GMT, the euro was firmly on the back foot against the main currencies. The European currency was down 0.12% against the pound and lost 0.70% and 0.75% respectively against the dollar and the yen, while Brent crude gained 0.58% to $44.44

Draghi hints at fresh stimulus

ECB chief Mario Draghi said in a speech in Frankfurt that the central bank was ready to act to boost inflation and that it would review policy at the December meeting.

"If we decide that the current trajectory of our policy is not sufficient to achieve our objective, we will do what we must to raise inflation as quickly as possible," Draghi said.

"We consider the asset purchase programme to be a powerful and flexible instrument, as it can be adjusted in terms of size, composition or duration to achieve a more expansionary stance."

However, analysts warned Draghi’s dovish comments could backfire if the central bank opted against implementing fresh stimulus measures.

“As we approach the December meeting, Draghi is making it seem ever more likely that the ECB will act, by either cutting rates, raising or extending quantitative easing,” said IG’s Market analyst Joshua Mahony.

“The problem is that for every time he speaks, he raises the markets’ hopes of action and thus the negative market reaction should the ECB fail to act.”

Meanwhile, Jens Weidmann – the head of the Bundesbank and a governing council member of the European Central Bank – warned that the longer we go with ultra-loose monetary policy, the greater the risks.

He said the central bank’s existing monetary measures still need time to filter through.

“I see no reason to talk down the economic outlook and paint a gloomy picture,” he said.

"We should also not forget that the monetary policy measures already taken still need time to fully feed into the economy."

On the macroeconomic front, consumer confidence in the Eurozone rose more than expected in November.

According to the European Commission, the index of consumer confidence rose 1.6 points to -6.0 points from an upwardly revised -7.6 in October, compared with analysts’ expectations for a -7.5 reading.

Elsewhere, data released by Destatis showed German producer prices fell 2.3% in October from last year, marking the biggest drop since February 2010 and weaker than the 2% decline economists had been expecting.

In company news, Switzerland’s OC Oerlikon surged 6.47% after Sweden's Atlas Copco said it would buy its vacuum business for an enterprise value of €486m (£340m).

ABN Amro gained 3.38% on the day it made its debut on the Amsterdam Stock Exchange, seven years after the Dutch government rescued the lender in a bailout deal worth €24bn.