European stocks down despite Draghi pledge

Europe's equities fell Friday, losing steam after an early rally on the back of European Central Bank chief Mario Draghi's vow to continue its stimulus programme for "as long as needed" to stabilise prices.

Investors also remained mindful of developments in Greece, which is still struggling to hammer out a debt reform agreement with creditors.

In mid-afternoon deals, London's benchmark FTSE 100 index of leading companies dropped 0.08 percent to 6,967.39 points.

In Paris, the CAC 40 index dipped 0.18 percent to 5,020.30 points and Frankfurt's DAX 30 slipped 0.33 percent to 11,521.50 compared with the close on Thursday, when many traders were away for a public holiday in both European capitals.

Eurozone bond markets meanwhile calmed following a steep sell-off in recent weeks.

US stocks opened higher with the S&P 500 looking to lift further a day after notching a new all-time high.

Five minutes into trade, the S&P 500 was up 0.10 percent at 2,123.16 points, while the Dow Jones Industrial Average added 0.80 percent to 18,266.22.

The tech-rich Nasdaq Composite Index, meantime, gained 0.23 percent to 5,062.21 points.

The slight downturn in European indices followed earlier gains across the board fuelled by Draghi's stimulus pledge.

"After almost seven years of a debilitating sequence of crises, firms and households are very hesitant to take on economic risk," said Draghi in a speech at an International Monetary Fund forum.

"For this reason quite some time is needed before we can declare success, and our monetary policy stimulus will stay in place as long as needed for its objective to be fully achieved on a truly sustained basis," he said.

- Draghi has 'immediate impact' -

With the economy and inflation recently picking up, there has been speculation that the ECB would wind up early its unprecedented 1.1 trillion euro ($1.3 trillion) asset-purchase program, widely known as quantitative easing (QE).

"Draghi reinforced the belief the central bank will carry out the QE programme in full," said IG analyst Stan Shamu.

"This seems to have been what investors wanted to hear as it had an immediate impact on markets, helping bond markets settle down and seeing equities rally as fears the ECB may pull the QE pin early abated."

That sent the euro rallying to another three-month peak at $1.1445, up from $1.1414 late in New York on Thursday, aided by this week's upbeat eurozone growth data. By mid-afternoon, however, it had pulled back to $1.1342.

"Bond prices peaked a little under a month ago but selling really picked up in the last couple of weeks, triggered largely by higher inflation expectations on the back of rising oil prices," Oanda analyst Craig Erlam told AFP.

He added: "The sell-off in bond markets does appear to be slowing though now, following what was quite a dramatic decline in a very short period of time."

Asian equities mostly advanced Friday following a healthy rally on Wall Street, while Tokyo was supported by a weaker yen and Hong Kong enjoyed strong buying.

Tokyo's Nikkei index climbed 0.83 percent and Sydney added 0.66 percent.

Hong Kong rallied 1.96 percent on speculation authorities will soon announce a tie-up between the city's index and Shenzhen's, similar to that with Shanghai.

On the downside, Seoul fell 0.65 percent, while Shanghai shed 1.59 percent.

- Wall Street rebounds -

Wall Street rebounded Thursday as expectations the Federal Reserve will hike interest rates have fizzled in the wake of a string of soft economic indicators.

Figures showing the US producer price index fell 0.4 percent last month more than wiped out March's first increase since October, and fell well short of forecasts for a 0.2 percent rise. That came a day after news that retail sales saw their weakest year-on-year growth since 2009.

The results also follow other poor recent indicators -- including anaemic wage growth, a tepid manufacturing sector and weak economic growth -- which analysts mostly say will likely keep the Fed from raising rates soon.

In company news on Friday, British drinks giant SABMiller announced the purchase of small London-based brewery Meantime, which is benefitting from booming British demand for craft beer.

In midday trade, SABMiller's share price rose 0.67 percent to 3,624 pence after it announced the friendly takeover for an undisclosed sum.