Europe close: Stocks end on a mixed note despite 'dovish' ECB
By Alexander Bueso
Date: Thursday 06 Jun 2019
(Sharecast News) - Stock markets on Continent finished the session on a mixed note as some traders expressed disappointment at what they said was a less dovish than expected policy decision from the European Central Bank.
On Thursday, the ECB's governing council extended its so-called forward guidance by another six months, meaning that rate hikes were no longer seen rising until "at least" mid-2020.
ECB chief Mario Draghi went as far as to say that as part of contingency planning, the GC had concluded that further rate cuts, a re-start of quantitative easing and even greater fiscal stimulus would need to be employed, but markets and traders were apparently underwhelmed.
"European markets are on the slide in the latter half of the day, as disappointment over the degree of dovish sentiment from the ECB dented optimism following a strong start to the day," said IG's Josh Mahony.
In the background, and weighing on investor sentiment on both sides of the Pond, a meeting between US and Mexican officials to discuss immigration, on Wednesday evening, had been adjourned without reaching an agreement, leading the US President to reiterate a previous threat to impose tariffs of up to 25% on goods from its southern neighbour.
Those talks were set to continue on Thursday.
By the end of trading, the benchmark Stoxx 600 had drifted lower by 0.02% to 374.01, alongside a dip of 0.23% for the German Dax to 11,953.14, while Italy's FTSE Mibtel was up by 0.11% to 20,177.43.
Spain's Ibex 35 also finished higher, albeit by just 0.20% to 9,169.20.
Meanwhile, the Stoxx 600's sub-index for lenders shares dropped by 1.10% as traders moved to price-in a more dovish ECB.
Euo/dollar was 0.5% higher to 1.12808.
To take note of, speaking from the St. Petersburg International Economic Forum, Bank of Russia Governor, Elvira Nabiullina, said an interest rate cut was possible at next week's policy meeting.
And overnight, the Reserve Bank of India followed Australia's lead, two days before, and cut rates - as expected.
Elsewhere on the economic front, Eurostat confirmed that the euro area's gross domestic product expanded at a quarter-on-quarter pace of 0.4% in the first quarter of 2019, helped by a 1.1% jump in investment.
Greece's national statistics office ELSTAT however reported that the rate of unemployment in the Mediterranean country fell from a downwardly revised 18.4% for February to 18.1% in March.
In the corporate patch meanwhile, all eyes were on Renault after Fiat Chrysler opted to walk away from merger talks - at least for now - reportedly after the government in Paris asked for the negotiations to be postponed.
Also on the M&A front, citing people familiar with the discussions, Bloomberg reported that the German government was "probing" a possible tie-up between Commerzbank and ING.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN