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European Markets Climbed As Central Bankers Defend Stimulus

The European markets finished in positive territory Thursday, despite the lingering uncertainty created by the Italian election. The reason for the positive mood among investors was comments made by ECB President Mario Draghi, who indicated that monetary stimulus would be continued. U.S. Federal Reserve Chairman Ben Bernanke also continued to defend the central bank's loose monetary policy during his second day of testimony before Congress on Wednesday.

European Central Bank President Mario Draghi indicated that the central bank is in no hurry to exit stimulus as he anticipates inflation to come significantly below the bank's target this year, giving room for maintaining an accommodative monetary stance.

ECB policymakers are "far" from considering an exit from the current accommodative stance, Draghi said during a speech at the Catholic Academy of Bavaria on Wednesday. He said the central bank forecasts next year's inflation to be significantly below the 2 percent target.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.94 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.10 percent.

The DAX of Germany climbed by 0.86 percent and the CAC 40 of France advanced by 0.85 percent. The FTSE 100 of the U.K. rose by 0.68 percent and the SMI of Switzerland gained 1.45 percent.

In Frankfurt, Bayer increased by 3.41 percent after annual sales reached a record high.

RWE was upgraded at Morgan Stanley to "Overweight" from "Equal weight" and gained 2.12 percent.

Societe Generale downgraded Salzgitter to ''Hold'' from ''Buy.'' The stock declined by 1.67 percent.

Deutsche Telekom finished unchanged after reporting financial results.

Hochtief dropped by 7.20 percent. The construction company reported a profit for the year and announced plans to sell some businesses to return the company to a sustainable growth trajectory.

In Paris, Essilor International climbed by 5.94 percent. The company reported a higher annual profit

Veolia Environnement, which reported an annual profit, rose by 1.31 percent.

In London, International Consolidated Airlines surged by 7.89 percent, after reporting financial results.

ITV advanced by 4.37 percent. Investec upgraded the stock to ''Hold'' from ''Sell.''

Reed Elsevier gained 1.43 percent, following its full year report. Kazakhmys, which named a new finance chief, decreased by 8.57 percent.

Royal Bank of Scotland fell by 6.60 percent, after reporting a hefty quarterly loss.

Petrofac dropped by 2.87 percent, after Societe Generale downgraded its rating to "Hold" from "Buy."

Shire declined by 1.76 percent, after Nomura downgraded its rating to "Neutral" from "Buy."

Inflation in the euro area, as per the harmonized index of consumer prices, weakened in January as estimated earlier, final data from statistical office Eurostat showed Thursday. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2 percent on an annual basis in January, after rising 2.2 percent in December. The latest figure matched preliminary estimates.

Eurocoin indicator, a measure of economic climate in the euro area, rose for a third consecutive month in February to its highest level in eight months, survey data from the Bank of Italy and the think tank CEPR showed Thursday.

The eurocoin indicator, designed to reflect the current economic situation in the Eurozone, climbed to -0.20 from January's -0.23. The score is the highest since June last year.

Unemployment in Germany declined unexpectedly in February and for a third consecutive month, suggesting that the economy has started to recover in the first months of 2013 after a contraction in the final quarter of 2012.

The number of unemployed declined by 3,000 in February from the previous month to 2.917 million, the Federal Labor Agency said Thursday. This was contrary to expectations for no change. In January, unemployment fell by a revised 14,000.

Unemployment rate in Germany remained unchanged at 5.3 percent on an adjusted basis in January, data from the Federal Statistical Office showed Thursday. On the other hand, the unadjusted jobless rate rose to 5.9 percent in January from 5.3 percent in December.

Germany's EU harmonized inflation slowed less than economists expected in February, latest data showed Thursday. Inflation as per the harmonized index of consumer prices (HICP) dropped to 1.8 percent in February from 1.9 percent in January, preliminary data from the Federal Statistical Office showed. Economists had forecast a faster deceleration to 1.7 percent.

France's producer price inflation surpassed economists' expectations in January, data released by statistical office Insee showed Thursday. The producer price index for the domestic market increased 1.4 percent on an annual basis in January, slightly faster than the 1.3 percent gain economists had forecast.

French households' consumption of goods decreased in January after rising in the previous month, and the rate of fall exceeded economists' forecast, latest data showed Thursday. Overall consumer spending decreased 0.8 percent on a monthly basis in January, after rising 0.2 percent in December, statistical office Insee said. Economists had forecast a more modest decrease of 0.3 percent.

Swiss economic growth slowed in the fourth quarter following a strong rebound in the third quarter, as net exports of goods and services contributed negatively to the country's gross domestic product, data published by the State Secretariat for Economic Affairs, or SECO, revealed Thursday.

The GDP rose 0.2 percent quarter-on-quarter in the fourth quarter, decelerating from the third quarter's 0.6 percent expansion. However, the outcome was better than economists' forecast for a flat reading.

While fourth quarter U.S. GDP data was revised to show economic growth compared to the previously reported contraction, the pace of growth fell well short of economist estimates. A report released by the Commerce Department on Thursday said GDP increased at an annual rate of 0.1 percent in the fourth quarter compared to the 0.1 percent drop that was originally reported.

Economists had been expecting a more substantial upward revision, with the consensus estimate calling for the revised report to show 0.5 percent growth.

In an upbeat sign for the job market, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits fell by much more than anticipated in the week ended February 23rd. The report said initial jobless claims dropped to 344,000, a decrease of 22,000 from the previous week's revised figure of 366,000.

Economists had expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.

Chicago-area business activity unexpectedly increased at a faster rate in the month of February, according to a report released by the Institute for Supply Management - Chicago on Thursday, with the business barometer rising to its highest level in almost a year.

The report said the Chicago business barometer rose to 56.8 in February from 55.6 in January, with a reading above 50 indicating an increase in business activity. The increase came as a surprise to economists, who had expected the barometer to edge down to 55.0.

by RTT Staff Writer

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