Italy, Spain lead stock higher on ECB stimulus bet
* FTSEurofirst 300 up 0.4 pct, Euro STOXX 50 up 0.5 pct
* Italy, Spain lead rally as investor bet on ECB stimulus
* Austrian banks in relief rally as Ukraine tensions seen easing
By Francesco Canepa
LONDON, March 6 (Reuters) - Italian and Spanish shares led European bourses higher on Thursday as investors bet the European Central Bank would act to stimulate the region's economy and diplomatic efforts would moderate the Ukraine crisis.
Banks in Spain and Italy, two economies which are suffering from still subdued economic activity and inflation, led a rally in the Euro STOXX banking index on speculation the ECB's President Mario Draghi may take action to loosen lending conditions.
Italy's FTSE MIB was up 0.8 percent after briefly hitting a high not seen since June 2011 while Spain's Ibex 35 was up 1.1 percent, making the two indexes the best performers among their European peers.
Traders speculated the ECB, due to hold its monthly policy meeting on Thursday, may take its deposit rate into negative territory to stimulate lending. An ECB source told Reuters earlier this week the bank would end the so-called sterilisation of the bond purchases under the bank's Securities Markets Programme (SMP).
"Some people think he'll cut rates...and that's why the market is ticking up," Mike Reuter, a broker at Tradition, said. "If nothing happens at all the market is going to be disappointed. On a morning like this I'd take profit and wait." Continuación...