European Markets Finish Under Water On Thursday

The major European stock markets closed in the red on Thursday following the interest rate decision and commentary from the European Central Bank. The markets were mixed and little changed in morning trade but turned lower after the ECB’s announcement.

The central bank left interest rates unchanged for a fifth policy session in a row as expected, but the outlook warned of a challenging global economy pressured by ongoing trade wars and geopolitical conflicts.

The Governing Council, led by ECB President Christine Lagarde, held the benchmark interest rate – the deposit rate, steady at 2 percent. The refinancing rate was retained at 2.15 percent and the marginal lending rate at 2.40 percent. The bank expects inflation in the euro area to stabilize at its 2.00 percent target in the medium term.

The continued rotation out of technology stocks added to the negative sentiment.

Germany’s DAX sank 111.98 points or 0.46 percent to finish at 24,491, while the FTSE in London dropped 93.12 points or 0.90 percent to close at 10,309.22 and the CAC 40 in France fell 23.99 points or 0.29 percent to end at 8,23817.

In Germany, Deutsche Bank tumbled 3.94 percent, while Volkswagen slumped 3.68 percent, Deutsche Borse rallied 3.50 percent, Infineon Technologies jumped 2.73 percent, Siemens Energy dropped 1.72 percent, Heidelberg Materials sank 1.55 percent, Deutsche Telekom advanced 0.72 percent, Vonovia added 0.36 percent and Deutsche Post dipped 0.16 percent.

In London, Entain plummeted 4.81 percent, while Vodafone plunged 4.68 percent, Shell tanked 3.40 percent, Prudential tumbled 3.29 percent, Experian jumped 2.95 percent, Autotrader retreated 2.63 percent, Compass Group declined 1.94 percent, Centrica slumped 1.60 percent, British American Tobacco climbed 1.36 percent, Rightmove dropped 1.20 percent and Rolls-Royce lost 0.82 percent.

In France, Credit Agricole tanked 2.50 percent, while Legrand spiked 2.48 percent, Engie contracted 2.04 percent, Societe Generale gave up 1.96 percent, Worldline shed 1.95 percent, Vinci lost 1.73 percent, BNP Paribas climbed 1.15 percent, Sanofi fell 0.92 percent, Airbus added 0.67 percent, Veolia Environnement sank 0.78 percent and Vivendi perked 0.09 percent.

In economic news, the Bank of England maintained its interest rate in a close decision and signaled rate cut as inflation is expected to fall back in the near term. The Monetary Policy Committee, governed by Andrew Bailey, voted 5-4 to hold the bank rate at 3.75 percent, which was the lowest since early 2023.

Eurozone retail sales declined more than expected in December due to the fall in non-food product turnover. Retail sales fell 0.5 percent month-on-month in December, marking the first fall in four months, Eurostat said. The decline followed November’s 0.1 percent rise. Sales were forecast to drop 0.2 percent.