* Pan-European STOXX 600 index up 0.2 pct
* Banks waver after Draghi remarks, real estate up
* Shares off lows as commodity stocks recover
* Pearson slumps
(Recasts, adds detail and updates prices at close)
By Danilo Masoni and Kit Rees
LONDON, April 6 European shares ended slightly
higher on Thursday, with banks seeing a volatile session as
dovish comments from ECB chief Mario Draghi triggered talk over
the outlook for monetary policy in the region.
The STOXX 600 index reversed losses to end 0.2
percent higher, while Britain's FTSE lagged and
Germany's DAX gained 0.1 percent.
Banks were initially hit after Draghi poured cold water on
expectations of tightening measures in remarks suggesting the
European Central Bank would not change its policy message this
But the sector, which has moved sideways in the past few
weeks, recovered as investors shifted their focus to the
longer-term outlook for interest rates in the single currency
"Everybody knows where monetary policy is going in the euro
zone: it's going to be tighter," said Arne Petimezas, analyst at
AFS Group in Amsterdam.
The euro zone banking index fell as much as 1.4
percent and ended the session 0.8 percent higher. The broader
European banking index rose 0.3 percent as losses among
UK banks weighed.
While banks had a volatile session, the dovish tone struck
by Draghi supported real estate stocks, pushing the sectoral
index up 1.2 percent to a six-month high.
"Real estate is recovering from worries that rates could
start a phase of strong increases," said Giuseppe Sersale, fund
manager at Anthilia Capital Partners in Milan.
Among real estate stocks, French-headquartered Unibail
Rodamco provided the biggest boost to the sectoral
index with a rise of 1.7 percent.
Among euro zone banks, the top two fallers were Austria's
Raiffeisen Bank and Germany's Commerzbank,
down 1.1 percent and 0.8 percent respectively.
Anthilia's Sersale said investors took some profits out of
European shares after a strong gain in March and with sentiment
dampened after the minutes of the Federal Reserve's last meeting
raised worries over high stock market valuations.
Elsewhere broker upgrades drove price action.
Pearson was the top loser on the STOXX, down 6.7
percent, as the British education firm traded ex-dividend and
was further weighed down by a downgrade from Exane to
AstraZeneca fell 1.3 percent after a UBS downgrade
to neutral, while German airport operator Fraport rose
4.4 percent with traders linking the rise to an upgrade to "buy"
from Societe Generale.
German drugs packaging firm Gerresheimer dropped
nearly 5 percent after reporting results for the first quarter.
European shares came off lows as commodity stocks recovered
after crude oil prices turned higher. Tullow Oil was the
top gainer, up 7.5 percent after it traded without rights to its
(Reporting by Kit Rees and Danilo Masoni; Editing by Alison