The majority of the European markets ended Thursday's session with small losses. Central banks were in focus, as investors had their first opportunity to react to yesterday's rate hike by the Federal Reserve. The European Central Bank, the Bank of England and the Swiss National Bank all decided to leave their respective interest rates unchanged today.
The European Central Bank left its monetary policy stance unchanged on Thursday. However, the ECB raised the euro area growth forecasts, as it gained confidence from the strong momentum this year, but inflation was seen to remain short of its target into 2020, which Mario Draghi called a "muted" news that warrants support from massive monetary stimulus.
However, an optimistic ECB President said the bank was more confident of inflation reaching its target of "below, but close to 2 percent" than it was two months ago.
In its latest round of macroeconomic projections, unveiled on Thursday, the ECB Staff raised the growth forecast for this year to 2.4 percent from 2.2 percent.
The outlook for next year was sharply lifted to 2.3 percent from 1.8 percent. The projection for 2019 was raised to 1.9 percent from 1.7 percent.
The Bank of England policymakers unanimously decided to leave its key interest rate unchanged on Thursday after tightening it for the first time in a decade in November.
The Monetary Policy Committee, headed by Governor Mark Carney, voted to maintain the benchmark rate at 0.50 percent. The bank had raised its rate by a quarter point at the previous session in November.
Policymakers voted unanimously to maintain the quantitative easing at GBP 435 billion.
The Swiss National Bank maintained its expansionary monetary policy stance on Thursday and reaffirmed its commitment to remain active in the foreign exchange market when necessary.
Further, the bank forecast inflation to exceed its target in three years' time due to the weaker currency.
The pan-European Stoxx Europe 600 index weakened by 0.30 percent. The Euro Stoxx 50 index of eurozone blue chip stocks decreased 0.71 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.34 percent.
The DAX of Germany dropped 0.44 percent and the CAC 40 of France fell 0.78 percent. The FTSE 100 of the U.K. declined 0.65 percent and the SMI of Switzerland finished lower by 0.12 percent.
In Frankfurt, engineering specialist Bertrandt Group's stock declined 0.83 percent after reporting sharply lower profit in its fiscal 2017, despite slightly higher revenues. The company also maintained its dividend.
Steinhoff International tumbled 12.84 percent after it announced that it will restate 2016 results.
In Paris, Atos dropped 2.65 percent after Gemalto rejected Atos' 4.3 billion euro takeover bid, saying the offer undervalued the company.
In London, Petrofac fell 0.92 percent after it said its overall trading remains in line with expectations and that Chairman Rijnhard Van Tets has notified the Board of his intention to step down from the Board.
Capita plunged 12.62 percent and touched a 12-year low in the process, after the company cautioned that a recovery in 2018 was unlikely as major contracts remained subdued.
Lonmin surged 20 percent after Sibanye-Stillwater agreed to acquire the company.
Eurozone private sector activity expanded at the fastest pace in nearly seven years in December, flash survey data from IHS Markit showed Thursday. The headline composite output index climbed to an 82-month high of 58.0 in December from 57.5 in November. Meanwhile, the index was expected to fall to 57.2.
Germany's private sector activity expanded at the fastest pace in over six-and-a-half years in December, flash survey results from IHS Markit showed Thursday. The flash composite output index rose to an 80-month high of 58.7 in December from 57.3 in November.
France's private sector maintained strong growth momentum in December, driven by solid expansion in manufacturing activity, flash survey data from IHS Markit showed Thursday. The composite output index dropped to a 2-month low of 60.0 in December. Economists had expected the index fall to 59.6.
France's consumer price inflation accelerated slightly as initially estimated in November, final figures from the statistical office Insee showed Thursday. Inflation rose to 1.2 percent in November from 1.1 percent in October. That was in line with the flash data published on November 30.
UK retail sales grew the most in seven months in November, figures from the Office for National Statistics showed Thursday.
Retail sales volume climbed 1.1 percent on a monthly basis in November, with strong contribution from households goods stores. This was the biggest increase since April, when sales advanced 1.9 percent.
Sales were forecast to grow marginally by 0.4 percent after expanding 0.5 percent in October.
Retail sales in China were up 10.2 percent on year in November, the National Bureau of Statistics said on Thursday. That missed forecasts for 10.3 percent but was still up from 10.0 percent in October.
First-time claims for U.S. unemployment benefits unexpectedly decreased in the week ended December 9th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims dropped to 11,000 from the previous week's unrevised level of 236,000. Economists had expected jobless claims to inch up to 239,000.
Retail sales in the U.S. increased by much more than anticipated in the month of November, the Commerce Department revealed in a report released on Thursday. The report said retail sales climbed by 0.8 percent in November after rising by an upwardly revised 0.5 percent in October.
Economists had expected retail sales to increase by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.
A report released by the Labor Department on Thursday showed U.S. import prices increased in line with economist estimates in the month of November, while export prices rose by much more than anticipated.
The Labor Department said its import price index climbed by 0.7 percent in November after inching up by 0.1 percent in October.
Export prices rose by 0.5 percent in November after ticking up by 0.1 percent in the previous month. Economists had expected export prices to edge up by 0.2 percent.
A report released by the Commerce Department on Thursday showed a modest decrease in U.S. business inventories in the month of October. The Commerce Department said business inventories edged down by 0.1 percent in October after showing no change in September. The slight drop in inventories matched economist estimates.
by RTT Staff Writer
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