Europe close: Stocks come off lows to end the day mixed

Stocks finished on a mixed note on Thursday, but off their lows of the session in all cases, as the European Central Bank's surprise 50 basis point rate hike and new policy tools offset news of Italian Prime Minister Mario Draghi's resignation.

Draghi's exit was expected to result in early elections on 25 September according to sources cited by Bloomberg and might result in a victory for a centre-right coalition.

News that Gazprom had restarted natural gas flows through the Nordstream 1 pipeline also appeared to soothe some nerves, despite geopolitical tensions remaining sky-high.

The benchmark Stoxx 600 added 0.44% to 424.39, alongside a 0.71% fall on Milan's FTSE Mibtel to 21,196.59 while the German Dax dipped 0.27% to 13,246.64.

Euro/dollar was little changed alongside, trading up by 0.05% to 1.0185, although that was down from 1.0278 immediately after the European Central Bank announced its interest rate hike.

The yield on the benchmark 10-year Italian government bond was 9bp higher to 3.459% on the news about Draghi but came off its highs following the ECB's announcements.

Similarly-dated Spanish government bonds on the other hand were slightly lower.

Investors were also digesting the guidelines provided by the ECB for its new Transmission Protection Instrument or so-called anti-fragmentation tool.