LONDON: A key European benchmark index closed near three-month highs on Wednesday, with expectations of new European Central Bank stimulus measures providing support.
The pan-European FTSEurofirst 300 index edged up 0.01 percent but the euro zone's blue-chip Euro STOXX 50 fell 0.2 percent as some profit taking kicked in.
European stocks have risen to their highest level in around three months, largely owing to the prospect of new stimulus measures when the ECB meets on Thursday. Weaker-than-expected euro zone inflation data on Wednesday further underpinned hopes for strong central bank action.
"The stock markets are still running up off the back of the euro, and expectations that ECB head Mario Draghi will announce new easing tomorrow," said Hantec Markets analyst Richard Perry.
Investors are pricing in a deposit rate cut and an increase in the size, scope and length of the current trillion-euro bond-buying programme at the ECB meeting. That has put pressure on the euro, whose weakness has in turn given European exporters such as carmakers and luxury goods stocks a lift.
Healthcare stocks were among the top gainers, helped by a series of broker upgrades. Roche rose 1 percent after Citigroup upgraded it to "buy" from "hold" while Morgan Stanley raised its targets on Roche and GlaxoSmithKline.
Arcelor Mittal, down 8.9 percent, was the top loser on the FTSEurofirst 300 after Citigroup cut its rating to "neutral", citing a rapid deterioration of the spot steel market.
German potash producer K+S fell 4.8 percent after the CEO of Potash Corp said a recent report of a new takeover bid for its rival is just a rumour.
Zodiac Aerospace fell 1.3 percent after Exane BNP Paribas downgraded it to "neutral" from "outperform". Car parts group Valeo slipped 2 percent after BNP Paribas sold some shares in the company.
Travel and leisure stocks were the best performing sector, up 1.1 percent. Miners were the weakest with a decline of 1 percent.
The FTSEurofirst 300 index remains up by around 10 percent since the start of 2015.
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