By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks edged lower across Europe on
Thursday after the European Central Bank decided to leave its key
interest rates unchanged.
The Stoxx Europe 600 lost 0.2% at 336.31. Just before the ECB
said it will keep its key lending rate at 0.25%, the index was
registering a fall of 0.1%. The central bank held its deposit rate
at 0% and its marginal-lending rate at 0.75%.
The Stoxx Europe 600 had been swaying between small gains and
losses throughout the session. On Wednesday, it posted its seven
consecutive wins in a row.
Investors will now look for comments by ECB President Mario
Draghi, who will hold his monthly news conference at 2:30 p.m.
Frankfurt time, or 8:30 a.m. Eastern Time. Follow the ECB live
blog.
Analysts, on average, expected the central bank to leave
interest rates unchanged, though there's been pressure on policy
makers to take action against low inflation. The ECB, meanwhile,
has to consider a slate of improving manufacturing data and an
overall pickup in economic growth. More on what the ECB decision
could mean for investors.
Banking stocks were mixed, with HSBC Holdings PLC higher by
0.3%, Barclays PLC up 0.5%, while shares of Deutsche Bank AG fell
1.7% following a ratings downgrade to overweight from neutral by
J.P. Morgan Cazenove.
Among country-specific indexes, losses accelerated on Germany's
DAX 30 after the ECB rate decision, falling 0.3% to 9,599.06.
Regarding the Deutsche Bank re-rating, final regulatory rules on
additional valuation adjustments for Europe will likely reduce the
German bank's capital by 2.2 billion euros ($3.03 billion) by the
second or third quarter, according to J.P. Morgan Cazenove. "This
decline is material for DB, considering its relatively tight
capital position and market concerns regarding capital at risk,"
its analyst Kian Abouhossein said in a note to clients.
France's CAC 40 gave up 0.2% to 4,420.93. On the economic front,
market-research group Markit said expansion in France's service
sector in March ended four months of decline, driven by a rise in
incoming new work. The activity index reached a 26-month high at
51.5, versus 47.2 in February.
The U.K.'s FTSE 100 was up less than 1 point at 6,659.26.
Advancers led by Tullow Oil PLC , Aberdeen Asset Management PLC and
Kingfisher PLC . Kingfisher shares rose 2.9% as the
home-improvement retailer said it's in talks to buy Mr Bricolage, a
move that would stretch its presence in the French market.
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