The European Central Bank announced it would cut its monthly pace of asset purchases to 30 billion euros from January 2018 until the end of September, "or beyond, if necessary," while maintaining its current rate of 60 billion euros a month until the end of this year.
"The recalibration of our asset purchases reflects growing confidence in the gradual convergence of inflation rates towards our inflation aim, on account of the increasingly robust and broad-based economic expansion, an uptick in measures of underlying inflation and the continued effective pass-through of our policy measures to the financing conditions of the real economy," ECB President Mario Draghi said in prepared remarks for reporters in Frankfurt.
Europe's Stoxx 600 Index finished the day with a 1.1 per cent increase from the previous close. The UK's FTSE 100 Index rose 0.5 per cent, while Germany's DAX Index rallied 1.4 per cent and France's CAC 40 Index climbed 1.5 per cent.
Shares of Anheuser-Busch InBev fell after the world's largest brewer report weaker-than-expected beer sales amid a decline in market shares in the US.
The Belgium-based company said beer volume declined 1.5 per cent in the third quarter from the year-earlier period.
"Continued strong growth in Mexico, Argentina, and Africa was more than offset by soft shipment volumes in the US, primarily driven by the substantial weather impact in many parts of the country, and Brazil," the company said in a statement.
Some analysts said weather wasn't the only cause for US weakness.
"Our view remains that unless and until AB InBev can get volumes growing sustainably the business model will remain under significant pressure,"James Edwardes Jones, analyst at RBC Capital Markets, told Reuters.
The stock closed 0.7 per cent weaker in Brussels.
Meanwhile, Germany's Bayer has cut the value of its takeover of Monsanto by US$2.5 billion ($3.6b), which combined with windfalls from asset sales means it may have to raise less than expected from shareholders, Reuters reported.
The Monsanto deal is now valued at US$63.5b ($92.8b) including debt, down from an initial US$66b (($96.5b), because the US seeds giant had lowered its financial liabilities, Bayer's finance chief said on Thursday, according to Reuters.
Bayer said in September 2016 when the deal was announced that it would raise US$19b ($27.7b) worth of fresh equity capital, some of which would be covered by 4 billion euros ($6.8b) in mandatory convertible notes issued in November 2016. Analysts had expected Bayer's cash call to be around US$12b ($17.5b) , but estimates have since dropped below US$10b ($14.6b), according to Reuters.
"We will examine whether and to what extent the equity component of the financing will change," Bayer Chief Executive Werner Baumann, the deal's main architect, said on Thursday, Reuters reported.
Shares of Bayer closed 1.6 per cent weaker in Frankfurt.
