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* ECB dials back stimulus a notch
* Airbus wins aircraft deals from Qantas and Air France-KLM
* UK bank shares leap as BoE hikes rates
* Euro zone PMI data disappoints
(Updates to close)
By Anisha Sircar and Susan Mathew
Dec 16 (Reuters) - European shares had their best day in
more than a week on Thursday, led by gains in banks and miners
after the European Central Bank promised continued support to
the economy, still choosing to incrementally withdraw stimulus.
The pan-European STOXX 600 index rose 1.2%, while
the euro zone index closed up 0.9%.
The ECB only slightly reined in stimulus, as it strives for
sustainable economic growth, saying it would wind down its 1.85
trillion euro Pandemic Emergency Purchase Programme by March.
New data showed euro zone business growth slowed more than
expected in December as renewed measures to curb the Omicron
coronavirus variant curtailed recovery.
But the central bank plans to double bond buys to 40 billion
euros under the longer-running Asset Purchase Programme in the
second quarter before cutting them to 30 billion euros in the
third quarter.
"Despite a somewhat faster transition phase after PEPP ends,
the open ended nature of purchases should be seen as a sign that
the ECB is still significantly more dovish than its peers,"
Rabobank analysts said in a note.
"While the new inflation projections are significantly
higher, at 1.8% the medium-term forecasts still fall short of
the levels needed for sharper policy tightening."
The ECB decision came shortly after the Bank of England
became the first major central bank to raise borrowing costs
since the pandemic began, hiking rates to 0.25% from 0.1%.
That pushed Britain's benchmark bond yields
slightly higher to 0.75%. HSBC Holdings, Lloyds
and Barclay's jumped between 3.2% and 4.6% and
were among the top boosts on the FTSE 100 index.
On Wednesday, the U.S. Federal Reserve flagged a
long-awaited end to its pandemic-era bond purchases in March and
signalled as many as three rate hikes in 2022, but delivered an
otherwise upbeat economic outlook.
Oil and metal prices took heart, lifting energy stocks
and miners.
The healthcare sector was lifted by 5.7% surge in
Novartis AG after it launched a new share buyback of up
to $15 billion.
AstraZeneca gained 2.2% after saying a lab-study of
its COVID-19 antibody cocktail, Evusheld, found that the
treatment retained neutralising activity against the Omicron
coronavirus variant.
Airbus SE rose 2.4% after Australia's Qantas
Airways chose the planemaker as its preferred supplier for its
domestic fleet and Air France KLM struck a deal for
dozens of narrowbody jets.
French power giant EDF plunged 15.5% after it found
faults at a nuclear power station and shut down another plant
using the same kind of reactors.
(Reporting by Anisha Sircar and Shashank Nayar in Bengaluru;
Editing by Devika Syamnath, Krishna Chandra Eluri and Alison
Williams)
