Europe close: Equities end higher on extreme levels of central bank support

European equities have ended the day with very large gains, led by periphery stocks as long-term bond yields levels continued to move lower, with those for Italy now left standing at the same levels as before the recent elections.

Notably, at least for today the single currency was able to stand its ground in the face of rising Treasury yields Stateside in the aftermath of the better than expected monthly employment report.

Better than expected macroeconomic data out overnight in China and Japan also gave shares an early lift. However, economists at Nomura expressed surprise at the robust export data released by Beijing early Friday morning, telling clients that it may be masking some capital inflows.

Also worth noting, at least one Fed speaker today voiced his support for the current monetary policy stance. Even so, this afternoon Barclays Research wrote that: "We see the new highs in equity prices as a product of extreme levels of central bank support."

Interestingly, there seems to be some modest dispersion in economists' reactions to the European Central Bank President's press conference yesterday. For now however the correct reading seems to be that the ECB is 'on hold' unless the economic the flow of economic data were to deteriorate significantly.

Muted company news-flow

French Media conglomerate Lagardere pledged to sell its stake in European aerospace giant EADS before July 31st. That came as the firm unveiled that it had gone back into the blue last year, to the tune of €89m at the operating level.

Airline carrier SAS reiterated its forecast for a profit in the 2012/13 fiscal year this morning.

From a sector stand-point the best performance is now to be seen in the following sectors: Banks (2.55%), Telecommunications (2.37%) and Insurance (1.25%).

Mixed economic figures

The French central bank's business confidence barometer for the month of February has come in at 96 points, ahead of last month's level of 95.

Spanish industrial production contracted at a 5% month-on-month pace in January (Consensus: -6%).

German industrial production remained flat in January (Consensus: 0.4%), weighed down by falls in the production of capital goods and energy output.

Single currency stuck at 1.31

The euro/dollar was off by -0.76%, to 1.3010.

Front month Brent crude futures were down by 0.370 dollars to the 110.74 dollar mark on the ICE.