European Stocks Rise on European Central Bank Bond Buying, U.K. Deflation

LONDON (TheDeal) -- Mainland European stock indices rose sharply on Tuesday after a European Central Bank board member said the bank would boost its government-bond buying program before the summer. The comments from Benoit Coeure boosted bonds but they weighed on the euro, sending the currency down 1.1% against the dollar.

U.K. indices also gained ground, following a strong day in Asia, which piggybacked off record closing levels on Wall Street.

From Germany, the ZEW research institute's indices of analysts' and investors' economic sentiment in both Germany and the eurozone fell below expectations, while April consumer price figures from Eurostat for the eurozone matched initial estimates, putting the April inflation rate at zero.

But Office for National Statistics figures showed that the faster growing U.K. economy has now slipped into deflation, with consumer prices in April down 0.1% on the year. The pound fell 0.8% against the dollar.

In Frankfurt, the DAX shot up 1.69% at 11,790.00. In Paris, the CAC 40 surged 1.72% to 5,098.31. In London, the FTSE 100 was up 0.31% at 6,990.20.

Ireland's DCC (DCCPF), a FTSE 250 member, surged about 10% in London on news that it has bid €464 million ($519 million) for Royal Dutch Shell's (RDS.A) French liquefied petroleum gas business and has been granted exclusivity to finalize a deal.

But engineering group Aveva (AVEVF), which rose on Monday on bid speculation, was down almost 5% after reporting full-year results that showed revenue declined 12%, with pretax profit down 20%.

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