Europe close: Shares mixed, despite gains in banks

European stocks clambered back from their intra-day lows as the European Central Bank left the door open to further easing if necessary, amid a retreat in oil prices.

The benchmark DJ Stoxx 600 index closed 0.33% lower at 349.59 and France’s CAC 40 dipped 0.20% to 4,582.83 but Germany’s DAX was 0.14% firmer at 10,435.73.

ECB president Mario Draghi said the monetary authority stood ready to ease policy further should the outlook worsen, although he expected inflation to pick up in the back half of the year.

That promise sent the DJ Stoxx 600's gauge of bank stocks up by 1.44% to 155.91, helping to offset profit-taking in another subindex for the shares of Basic Resource (-1.87%) companies.

"European Economics Update 1 21st Apr. 2016 While the subsequent appreciation of the euro exchange rate suggests that markets had hoped for slightly firmer hints of imminent action, the President has left the door open to further support in

"But the Bank is running out of options that it deems palatable. And with little or no support from fiscal policy, its measures are unlikely to generate strong growth or a meaningful and sustained rise in inflation," Jennifer McKeown, senior european economist at Capital Economics, said in a research report sent to clients.

Meanwhile, oil prices were slightly lower, having gained earlier after the International Energy Agency said this year would see the biggest drop in non-OPEC production in a generation.

West Texas Intermediate was down by 0.75% to $43.87 while Brent crude was off by 1.059% at $45.32.

On the corporate front, shares in beleaguered German car maker Volkswagen rallied after Reuters cited sources as saying that VW and US officials had reached a framework deal under which the car maker would offer to buy back almost 500,000 diesel cars that used software to cheat US emission rules.

On the downside, French spirit maker Pernod Ricard slumped after posting a 3% decline in third-quarter sales.
Swedish mobile telecom equipment maker Ericsson was firmly in the red after its first-quarter sales and operating profit missed analysts’ expectations.

London-listed broadcaster Sky was under the cosh after it said customer growth slowed in the third quarter.