Europe close: Stocks edge higher despite commodity headwind

European stocks edged higher on Thursday as ECB chief Mario Draghi struck a more upbeat note, although oil prices proved a powerful drag.

By the closing bell the benchmark Stoxx Europe 600 index was up by 0.08% to 372.89, Germany’s DAX had gained 0.09% to finish at 11,978.39 and France’s CAC 40 had added 0.42% to 4,981.51.

Meanwhile, oil prices were on the back foot following higher-than-expected US inventories data from Thursday which fueled fears of oversupply.

West Texas Intermediate was down 3.1% to $48.79 per barrel - the first time prices have gone below $50 in 2017 - while Brent crude fell 2.91% to $51.61.

That saw the Stoxx 600's sector index for Oil&Gas shares drop 1.53% to 304.69.

In currency markets, the euro rose 0.11% against the dollar to 1.0580 and was up 0.41% versus the pound to 0.8693.

Economists spy very subtle shift in ECB stance

Almost exactly as expected, the European Central Bank kept all its main policy settings as they were, even as its chief struck a more upbeat note in his press conference.

The ECB's policy analysis continued to point to a need for maintaining a "very substantial" degree of policy accommodation to secure a "sustained" return to price stability "without undue delay", the ECB's governing council said in its policy statement.

On the flip side, they said the risks to the outlook had decreased.

"The risks surrounding the euro area growth outlook have become less pronounced, but remain tilted to the downside and relate predominantly to global factors."

Echoing the view of multiple ECB-watchers, Ben May at Oxford Economics wrote: "Although the underlying position of the ECB remains dovish, today’s ECB interest rate press conference signalled the start of a new phase for policy. While President Mario Draghi carefully calibrated his language and avoided saying anything that could be interpreted as outright hawkish, he no longer appeared to be trying to talk down the euro at all costs.

"For now, our view remains that the ECB will stick to its 2017 QE plans. But, absent any major shocks over the coming months, expect the language to gradually become less dovish over the spring and summer."

On the data front, the French central bank's business confidence index rose to 104 in February from 102 the previous month, and ahead of 102 consensus forecast. Non-farm payrolls in France grew 0.4% quarter-on-quarter in the final three months of 2016, according to INSEE.

Dutch consumer prices increased 0.9% month-on-month in February and 1.7% year-on-year as expected.

Ireland’s fourth quarter rate of GDP growth accelerated to 5.2% when compared to the previous quarter and was the European Union's fastest growing economy for the third consecutive year in 2016.

In corporate news Dutch chemicals company Akzo Nobel climbed 12.99% after it rejected a €20.9bn offer by US rival PPG Industries.

Carrefour was down 4.03% after the French supermarket giant reported that operating profit dropped 3.2% to €2.4bn and kept its dividend steady.

Merck fell 2.09% after the German pharmaceuticals posted a cautious outlook for 2017, although fourth-quarter profit more than doubled.

Aviva gained 6.46% after the insurer said it was making a £380m charge to account for the change on personal injury claim payouts and that full year operating profits rose 12% to £3bn.