Europe close: Stocks surge as ECB sounds more dovish note than expected

(Sharecast News) - European stock made strong gains Thursday as the European Central Bank shifted to a 'data-dependent' and investors seized on the possibility of an end to policy tightening. "he Fed helped US markets to edge higher yesterday, but that was nothing compared to the gains seen in European indices this afternoon," said IG chief market analyst Chris Beauchamp.

"Far from pouring cold water on the rally, Christine Lagarde has energised it anew with hints that the ECB's rate hike campaign could actually be at an end."

The pan-European Stoxx 600 jumped 1.35% to 471.74, alongside a 1.7% advance for the German Dax to 16,406.03.

But it was Italy's FTSE Mib that paced gains, rising by 2.13% to 29,597.81.

Worth noting, overnight the Federal Reserve had also shifted to a data-dependent mode, in effect leaving the door open to further hikes but also implying that it might be done with policy tightening.

In economic news, German consumer sentiment is expected to stabilise in August amid hopes of a decline in inflation, according to a survey released on Thursday by market research group GfK.

GfK's forward-looking consumer sentiment index for next month rose to -24.4 from a revised -25.2 in July. This was ahead of expectations for a reading of -24.7.

In equity news, shares in UK asset manager St James's Place plunged after it reported a fall in profits.

Barclays stock was lower as interim profits missed expectations and it expected lower net interest margins for the full year.

Centrica and UK car dealer Inchcape both made strong gains after results.