By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets struggled for
direction on Thursday after the European Central Bank and the Bank
of England left monetary policy unchanged as expected.
The Stoxx Europe 600 index slipped 0.1% to 316.99, putting it on
track for the lowest close since October.
Shares of Metro AG fell 4% after Morgan Stanley cut the German
retailer to equal weight from overweight as the share price
breached the bank's price target earlier in the week and the
analysts "struggle to identify any near-term catalysts."
Sydbank AS lost 4.9% after the Danish bank said it will book
impairment charges of around 850 million Danish kroner ($155
million) in the fourth quarter.
Drax Group PLC rose 2.9% after J.P. Morgan Cazenove lifted the
utility firm to overweight from neutral.
The U.K.'s FTSE 100 index was little changed around
6,510.73.
France's CAC 40 index slipped 0.1% to 4,145.12, while Germany's
DAX 30 index gained 0.1% to 9,147.01.
Investors digested the latest interest-rate decisions from two
of Europe's biggest central banks. The ECB left its key lending
rate at a record low of 0.25% and made no changes to other official
rates.
The central bank last month cut its lending rate by 25 basis
points in an effort to boost growth and stave off low inflation.
Since then, market participants have speculated whether the central
bank will launch unconventional easing measures such as
quantitative easing or negative deposit rates to further stimulate
the euro-zone economy and investors hope for more clues at ECB
President Mario Draghi's news conference at 1:30 p.m. London time
or 8:30 a.m. Eastern.
"Based on public commentary, it seems the ECB council is not
wholly convinced that last month's refi rate cut is sufficient to
counter the risk of 'prolonged low inflation,'" analysts at
Deutsche Bank wrote in a note. "The mixed data flow creates some
leeway for the ECB to stall a decision, await new data and make a
more informed decision on the state of the recovery," they
added.
The Bank of England also offered no surprises at its December
policy meeting, leaving the size of its bond-buying program
unchanged and holding its lending rate at a record low of 0.5%,
where it has stood since March 2009. The central bank's monetary
policy committee left its asset purchases, the centerpiece of its
quantitative-easing strategy, at 375 billion pounds ($614
billion).
Also on Thursday, the U.K. Chancellor of the Exchequer George
Osborne delivered his Autumn Statement on the economy to members of
parliament, including the latest forecast from the Office for
Budget Responsibility. The OBR more than doubled its growth
forecast for the U.K. for 2013 to 1.4% from an earlier forecast of
0.6% and raised the outlook for 2014 to 2.4% from 1.8%.
More must-reads from MarketWatch:
Oil futures extend gains on inventory fall
Apple's China boost, bitcoin bubble and scaling the 'wall of
worry'
2 million Internet accounts on Facebook, Twitter, ADP others hit
by mass hack
Subscribe to WSJ: http://online.wsj.com?mod=djnwires