Europe close: Stocks gain after BoJ stimulus, Eurozone inflation

European stocks gained as investors weighed the Bank of Japan’s decision to boost stimulus and a rise in Eurozone inflation.

The BoJ raised its annual target for monetary expansion to 80trn yen from a previous 60 to 70trn yen. The move came as Japan’s jobless rate rose to 3.6% in September from 3.5% the previous month, as expected.

Inflation in the world’s third largest economy fell to 3.2% in September from 3.3% the month earlier, which was also predicted by the market.

Eurozone inflation rose by 0.4% year-on-year in October, as expected, up from 0.3% the previous month. However, it remains below the European Central Bank’s (ECB) target of just under 2%.

The unemployment rate in the euro-area held at 11.5%, meeting forecasts.

“With euro-zone HICP inflation still close to zero in October and the unemployment rate holding near a record high, there remains a significant risk of deflation in the single currency area,” Capital Economics warned.

In other euro-area news, German retail sales rose 2.3% year-on-year in September, following a 0.1% rise the prior month. Analysts had estimated a 1.2% gain.

In another lift to markets, ECB official Ewald Nowotny said on Friday: "Never say never" to full-blown quantitative easing in the Eurozone.

In an interview with CNBC, he refused to rule out a Federal Reserve-style bond-buying programme, but said he doesn't see the need for it at the moment.

In the US, personal spending fell 0.2% in September, following a 0.5% increase a month earlier. Analysts had predicted a 0.1% rise.

The University of Michigan’s consumer confidence was revised higher to 86.9 in October from 86.4.

RBS, Barclays

Royal Bank of Scotland Group jumped after swinging to a third-quarter profit.

International Consolidated Airlines Group advanced as the owner of the British Airways and Iberia raised its full-year earnings guidance.

Danone climbed after agreeing to buy a 25% stake in Yashili International Holdings, a Chinese infant milk-formula maker.

BNP Paribas gained after posting an 11% increase in third-quarter profit that beat analysts’ estimates.

Barclays was higher after saying it is confident of reaching the leverage ratio set by the Bank of England.

The euro fell 0.63% to $1.2533.

Brent crude futures dropped 1.31% to $85.12 per barrel, according to the ICE.