(RTTNews.com) – The European markets fluctuated between small gains and losses over the course of Thursday’s session and ended the day with mixed results. The markets pared their early losses after today’s announcement from the European Central Bank. However, early weakness on Wall Street hampered their recovery attempt.
The European Central Bank left its key interest rates unchanged for a seventh consecutive policy session and maintained its asset purchases, which will continue at a reduced pace till the end of this year, as the solid economic momentum is sustained in the euro area despite the continuing political flux.
The Governing Council, led by ECB President Mario Draghi, left all its three interest rates unchanged. The main refi rate was kept unchanged at a record low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate was held at 0.25 percent.
The bank also retained its asset purchases of EUR 80 billion a month till March and to continue them at a reduced size of EUR 60 billion a month till December 2017.
Asset purchases can be extended beyond December if necessary, until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim, the ECB added.
Eurozone inflation is being driven largely by energy costs and the recent pick up in momentum is unlikely to sustain, ECB President Mario Draghi said Thursday, adding that policymakers will continue to look through transient changes.
“There are no signs yet of a convincing upward trend in underlying inflation,” Draghi said in Frankfurt in the introductory statement to his customary post-decision press conference.
Headline inflation is likely to pick up further in the near term, on the back of higher energy prices, the ECB Chief said. However, underlying inflation is expected to rise more gradually over the medium term, supported by monetary policy, the economic recovery and the corresponding gradual absorption of slack, he added.
The pan-European Stoxx Europe 600 index weakened by 0.14 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.11 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.30 percent.
The DAX of Germany dipped 0.02 percent and the CAC 40 of France fell 0.25 percent. The FTSE 100 of the U.K. declined 0.54 percent and the SMI of Switzerland finished lower by 0.47 percent.
In Frankfurt, Bayer AG increased 1.23 percent. The company has reportedly pledged after meeting with President-elect Donald Trump that it will maintain Monsanto’s entire U.S. workforce after acquisition of the U.S. agrochemical group.
Rhoen-Klinikum AG said, on the basis of new internal findings, the company’s board expects significant structural burdens on the results in a range of low to middle two digit millions for fiscal 2017. Shares fell 1.72 percent.
In Paris, Rémy Cointreau surged 6.39 percent. The company reported sales of 836.7 million euros in the first nine months of its 2016/17 financial year, with reported growth of 4.7%. In organic terms, at constant exchange rates and scope of consolidation, sales climbed 6.0% on the back of an impressive third-quarter performance.
Carrefour Group rose percent. The grocery retailer reported Thursday that its total group sales including value added tax or VAT were 23.37 billion euros, a growth of 2.9 percent on a like-for-like basis, excluding petrol and calendar.
Safran and Zodiac Aerospace announced they have entered into exclusive negotiations for an acquisition of Zodiac Aerospace by Safran. Zodiac soared 22.91 percent, but Safran dropped 5.43 percent.
In London, Royal Mail decreased 5.99 percent. The company reported that its Group revenue was flat year-over-year for the nine months ended 25 December 2016.
Moneysupermarket.com climbed 7.95 percent after it announced that it expects full year revenues to grow by 12 percent.
Ahold Delhaize jumped 5.92 percent in Amsterdam. The company reported consolidated net sales of 15.1 billion euros for the fourth quarter of 2016, an increase of 54.5% from last year, corresponding to pro forma net sales of 15.5 billion euros. Net sales were up 2.8% on a pro forma basis, at constant exchange rates and adjusted for week 53 in 2015.
The euro area current account surplus reached a record high level in November, the European Central Bank reported Thursday. The seasonally adjusted current account surplus rose to EUR 36.1 billion in November from EUR 28.3 billion in October.
Eurozone house prices grew at the fastest pace in more than eight years in the third quarter of 2016, Eurostat reported Thursday.
House prices advanced 3.4 percent year-on-year in the third quarter, faster than the 3 percent increase seen in the second quarter. This was the fastest since the first quarter of 2008, when prices climbed 3.5 percent.
The house price balance in the United Kingdom was down in December, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday with a seasonally adjusted reading of 24 percent. That was shy of expectations for 30 percent following the downwardly revised 29 percent reading in November.
First-time claims for U.S. unemployment benefits unexpectedly declined in the week ended January 14th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims fell to 234,000, a decrease of 15,000 from the previous week’s revised level of 249,000.
Economists had expected jobless claims to rise to 255,000 from the 247,000 originally reported for the previous week.
After reporting a steep drop in new U.S. residential construction in the previous month, the Commerce Department released a report on Thursday showing that housing starts showed a significant rebound in the month of December.
The Commerce Department said housing starts jumped by 11.3 percent to an annual rate of 1.226 million in December from the revised November rate of 1.102 million. Economists had expected housing starts to rise to an annual rate of 1.200 million from the 1.090 million originally reported for the previous month.
Meanwhile, the report said building permits, an indicator of future housing demand, edged down by 0.2 percent to a rate of 1.210 million in December from 1.212 million in November. Building permits had been expected to rise to 1.230 million from the 1.201 million originally reported for the previous month.
Philadelphia-area manufacturing activity unexpectedly grew at a faster pace in the month of January, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday. The Philly Fed said its index for current manufacturing activity in the region rose to 23.6 in January from a revised 19.7 in December, with a positive reading indicating growth.
The increase came as a surprise to economists, who had expected the index to drop to 16.0 from the 21.5 originally reported for the previous month.
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