European shares leap as ECB keeps up monetary support programme

(Updates prices)

* ECB to re-examine monetary support measures in December

* FTSEurofirst 300 and Euro STOXX 50 climb higher

* Publicis (Paris: FR0000130577 - news) slumps after growth target cut

By Sudip Kar-Gupta

LONDON, Oct (HKSE: 3366-OL.HK - news) 22 (Reuters) - European stocks jumped on Thursday after the European Central Bank decided to stick with its monetary support programme and to reassess in December whether further measures might be needed.

The pan-European FTSEurofirst 300 index rose 2.1 percent towards the close of trading, while the euro zone's blue-chip Euro STOXX 50 index climbed 2.7 percent.

The ECB kept interest rates unchanged at a record low. It also left the key parameters of its quantitative easing (QE) scheme unchanged but said it would re-examine the policy at its meeting in December.

Although some rate setters, such as Bank of Spain Governor Luis Maria Linde, have argued that the ECB should tweak the asset purchases now, most believe quantitative easing needs to be given more time to work as its positive effects are just starting to pass through.

The ECB's plans have also pushed down returns on bonds and cash, driving investors over to the better returns available from shares. Draghi also said the ECB had discussed a possible deposit rate cut.

"Draghi's comments mean continuous support for equities from the ECB," said Hampstead Capital hedge fund manager Lex Van Dam.

Denmark's Novozymes (Other OTC: NVZMF - news) , the world's largest industrial enzymes maker, was among the best performing stocks in Europe.

Its shares jumped 10.7 percent as investors expressed relief that the company's results had managed to meet market forecasts, with the stock having slumped in August after it reported disappointing second quarter results.

French spirits group Pernod Ricard (Paris: FR0000120693 - news) rose 5.1 percent after quarterly sales rose more than expected, as a strong U.S (Other OTC: UBGXF - news) . performance offset sluggish China sales.

Publicis slumped 8.2 percent, however, after the world's third-biggest advertising agency cut its annual organic growth target to 1 percent from 2.5 percent as quarterly sales slowed.

Today's European research round-up (Additional reporting by Danilo Masoni; Editing by Gareth Jones)