By This Is Money Reporters

PUBLISHED: 02:46 EST, 3 April 2014 | UPDATED: 11:33 EST, 3 April 2014

17.30 (CLOSE): Markets struggled for direction today despite the announcement of a long-awaited package of measures by China designed to boost flagging growth in the world’s second-biggest economy.

A decision by the European Central Bank (ECB) not to boost stimulus, together with lacklustre economic data from the US ahead of the release of key jobs figures, plus declining UK service sector growth, pulled in a negative direction.

It meant the FTSE 100 Index remained close to its opening mark, slipping 9.9 points to 6649.1. German’s Dax was also flat while France’s Cac 40 climbed.

ECB inaction: The European Central Bank, as expected, kept its monetary policy unchanged today

In New York, positive sentiment saw the Dow Jones Industrial Average breach the 16,600 barrier early in the session but it later drifted into the red.

On currency markets, sterling rose a little against the single currency after the ECB’S Mario Draghi insisted that it stood ready to loosen monetary policy should the economic outlook worsen. The pound stood at 1.21 euros and 1.66 US dollars.

Equities had started the day in slightly more positive mood after China unveiled its so-called mini stimulus, including additional spending on railways and tax relief for small businesses.

Economic updates from the UK and Europe were less encouraging, with closely-watched surveys from the services sector proving a disappointment.

A fall in the pace of growth in the sector in Britain – where it represents three-quarters of output – completed a hat-trick of weakening data after more sluggish expansion in construction and manufacturing was also revealed earlier this week.

Together they indicated that the pace of the UK’s economic recovery had slowed to its lowest level for nine months in March.

On the stock market, online takeaway service Just East delivered a strong start to trading in its 1.5 billion debut – the biggest UK technology initial public offering in eight years.

Shares were priced at 260p, but closed nearly 9 per cent, or 23p, higher at 283p.

B&Q parent Kingfisher was also making gains after it revealed talks to buy France’s Mr Bricolage in a deal worth 275 million euros (227million).

The firm, which already owns Castorama and Brico Depot in France, is proposing initially to acquire 68.1 per cent of the firm’s share capital – from the majority shareholders.

It then intends to make a subsequent offer to buy shares from minority shareholders at the same price.

Kingfisher chief executive Sir Ian Cheshire said it represented ‘an attractive growth opportunity’ and shares lifted 3 per cent, or 13p to 444.2p.

Cantor Fitzgerald analyst Freddie George said: ‘Mr Bricolage looks a compelling acquisition for Kingfisher and will strengthen its number one position in the French DIY market.’

Home wares chain Dunelm was a big riser in the FTSE 250 after posting a 5 per cent hike in third quarter like-for-like sales. Shares rose nearly 4 per cent, or 34.5p, to 1006p.

The biggest FTSE 100 risers were Tullow Oil, up 47p to 800p, Aberdeen Asset Management up 18.5p to 433.5p, Burberry up 42p to 1432p and Kingfisher up 13p to 44.2p.

The biggest FTSE 100 fallers were BSkyB down 26.5p to 892.5p, Royal Mail down 11.5p to 550.5p, Severn Trent down 37p to 1818p and Royal Bank of Scotland down 6p to 316.9p.

15.35: The Footsie found modest gains in late afternoon trade as European stock markets rallied following comments from ECB president Mario Draghi saying the bank is ready to deploy anything in its monetary policy toolbox if inflation stays too low.

With less than an hour of trading to go, the FTSE 100 index recovered from a slip lower following earlier news that the ECB had left its monetary policy unchanged today to add 4.0 points at 6,663.1.

In Europe. having both been around 0.2 per cent lower following the ECB rate decision, Germany’s Dax 30 index gained 0.2 per cent and France’s CAC 30 index added 0.3 per cent in the wake of Draghi’s comments.

Kingfisher rise: The owner of B&Q, which already owns two French brands – Castorama and Brico Depot – wants to buy out Mr Bricolage’s major shareholders

Ishaq Sidiqqi, market strategist at ETX Capital said: ‘Super Mario again proves he is a master wordsmith by shaking up financial markets with rhetoric about talk at the ECB over the possibilities of employing unconventional easing measures including QE.

‘It was expected that Draghi would hint at what’s inside the ECB’s war-chest but as expected, Draghi is relying on his words as a form of action.’

But the gains In London were modest as US stocks started the day in cautious fashion, shedding 5.4 points to 16,568.5 after recent gains with traders looking ahead to tomorrow’s US March jobs report after jobless claims rose more than expected in the latest week.

Among the gainers in London, Tullow Oil led the blue chip risers with a 5 per cent gain, up 42.8p to 795.8p after UBS upgraded its rating on the oil explorer to buy from neutral.

Kingfisher was also in demand, up 13.8p to 445.0p after Europe’s biggest home-improvement retailer launched a 225million takeover bid for France’s Mr Bricolage, moving to strengthen its position in its most profitable market.

Cantor Fitzgerald analyst Freddie George said: ‘Mr Bricolage looks a compelling acquisition for Kingfisher and will strengthen its number one position in the French DIY market.’

Homewares chain Dunelm was a good riser in the FTSE 250 after posting a 5 per cent hike in third quarter like-for-like sales.

The group said it reflected the absence of any snow disruption for this year as well as ongoing investments to boost its offer to customers that had driven sales. Dunelm shares rose 5.5p, to 951p.

And online takeaway service Just East delivered a strong start to trading in its 1.5billion debut – the biggest UK technology initial public offering in eight years.  Shares were priced at 260p, but quickly rose as much as 10 per cent before settling around 14p higher at 274p.

But mining stocks fell back today as copper prices weakened after Chinese stimulus measures fell short of expectations.

China unveiled a so-called mini stimulus, including additional spending on railways and tax relief for small businesses, designed to boost flagging growth in the world’s second-biggest economy.

In domestic data, a fall in the pace of growth in the services sector in Britain – which represents three-quarters of output – completed a hat-trick of weakening data after more sluggish expansion in construction and manufacturing was also revealed earlier this week.

Together they indicated that the pace of the UK’s economic recovery had slowed to its lowest level for nine months in March.

13.20: London shares drifted lower at lunchtime, tracking weakness in other European stock markets after the ECB failed to provide any action to stave off fears over deflation in the Eurozone.

The FTSE 100 index reversed its earlier modest gains to shed 5.7 points at 6,653.3, while Germany’s Dax 30 index and France’s CAC 40 index both fell 0.2 per cent.

The European Central Bank, as expected, held tight on its monetary policy at its latest governing council meeting shrugging aside fears over deflation despite a downbeat reading on prices in a business survey today.

The ECB kept its key interest rate unchanged at 0.25 per cent and failed to offer any stimulus measures to the currency bloc’s fragile economic recovery, despite recent market hopes for action.

ECB policymakers had been willing to publicly broach the idea of cutting interest rates below zero – effectively charging banks to hold cash with the ECB – or embarking on quantitative easing like the US, Japan and the UK.

Markets turned their attention to ECB President Mario Draghi’s news conference, due to start at 1.30 pm at which he is expected to give a more detailed explanation for the bank’s decision.

10.05: The FTSE 100 has edged up 14.2 points to 6,673.2 after China’s long-awaited package of measures to boost flagging growth in the world’s second biggest economy.

Asian stock markets made strong gains after the Chinese government unveiled its so-called mini-stimulus, including additional spending on railways and tax relief for small businesses. Wall Street also rose yesterday following encouraging US jobs data.

The FTSE 100 made a little headway, but traders are mostly focused on the ECB’s announcement on interest rates at lunchtime today.

Company float: Just Eat shares started trading on the London Stock Exchange today

Online takeaway service Just East delivered a strong start to trading in its 1.5 billion stock market debut – the biggest UK technology initial public offering in eight years

Shares were priced at 260p, but quickly rose as much as 10 per cent before later settling 7.4p higher at 267.4p.

B&Q parent Kingfisher was also making gains after it revealed talks to buy France’s Mr Bricolage in a deal worth €275million (227million).

The firm, which already owns Castorama and Brico Depot in France, is proposing initially to acquire 68.1 per cent of the firm’s share capital from the majority shareholders, before making a subsequent offer to buy shares from minority shareholders at the same price. Shares lifted 6p to 437.2p.

Homewares chain Dunelm was one of the biggest risers in the FTSE 250 after posting a 5 per cent hike in third quarter like-for-like sales, with shares up 2 per cent or 22.8p to 994.3p.

8.45: The FTSE 100 has opened just 5.2 points higher at 6,664.2 as investors wait to see if the European Central Bank has any new measures up its sleeve to support economic recovery and combat deflation.

Policymakers have been willing in recent weeks to publicly broach cutting interest rates below zero – effectively charging banks to hold cash with the ECB – or embarking on quantitative easing like the US, Japan and the UK.

A straightforward cut in the ECB’s main refinancing rate to 0.1 per cent from 0.25 per cent or more complex changes to existing market programmes are other possibilities.

However, the ECB is widely expected to keep interest rates steady and announce no new action to aid the eurozone’s fragile recovery despite a fall in inflation to its lowest in more than four years.

The ECB’s decision is due at lunchtime and will be followed by a news conference with president Mario Draghi at the central bank’s Frankfurt headquarters.

‘This week’s decline in EU inflation has once again increased calls for the ECB to outline further steps at easing monetary policy this week, particularly in light of Bundesbank President Jens Weidmann’s comments last week about the prospects of some form of QE,’ said Michael Hewson of CMC Markets.

‘The shift in tone has been seized upon as evidence that the ECB might be on the brink of a seismic move in policy.

‘This seems highly unlikely judging by the reaction of the currency markets that quite rightly see it as more evidence of the ECB’s impotence when it comes to monetary policy compared to the US Fed and the Bank of England. 

‘While current price pressures may well be weak, they are largely as a result of falling energy prices, which is not necessarily a bad thing, something a lot of commentators appear to be overlooking.

Decision day: ECB president Mario Draghi will hold a news conference at the central bank’s Frankfurt headquarters today

‘That’s not to say that there isn’t a deflation problem in Europe, there is, but there’s not much the ECB can do about it given the massive disparity in unit labour costs across the region.’

Hewson added: ‘The consensus still remains for rates to remain on hold, but it is slowly shifting to some form of action with some predicting a cut of 0.15 per cent in the headline rate and a negative deposit rate. 

‘This still seems unlikely at this stage, and even if implemented would have little lasting effect after the surprise factor had been digested.’

Darren Courtney-Cook, head of trading at Central Markets Investment Management, said of today’s likely market action: ‘I don’t think we’ll do too much ahead of the ECB. My own view is that if they cut, we may rally for a bit and then sell off, and if they don’t cut, markets will sell off.

‘I think the market has got ahead of itself, ahead of the ECB,’ he added.

The FTSE 100 closed up 6.43 points at 6,659.04 yesterday, its highest close since March 11. It was propped up by banks and mining companies on encouraging economic news from the US.

Stocks to watch today include:

VODAFONE GROUP: The mobile operator said it would add 150 shops and create 1,400 jobs across the United Kingdom during the next 12 months in a 100million investment.

ROYAL BANK OF SCOTLAND: Part-nationalised RBS said it will close 44 branches, of which 14 are classed as ‘Last Banks in Town’, in the UK.

SPORTS DIRECT: The sporting goods retailer has scrapped plans for a shareholder vote on a share bonus scheme worth 73million for its founder Mike Ashley after failing to secure enough support.

KINGFISHER: Europe’s biggest home improvement retailer has entered into exclusive negotiations with the main investors of French rival Mr Bricolage to buy their shareholdings.

BRITISH LAND: The landlord has signed a new 785million revolving credit facility.