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European stocks decline, Draghi remarks still weigh; Dax down 0.70%

Published 03/07/2014, 03:43 AM
European stocks open lower on ECB statement
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Investing.com - European stocks declined on Friday, as European Central Bank President Mario Draghi's comments on Thursday, while investors were eyeing U.S. employment later in the day.

During European morning trade, the EURO STOXX 50 edged down 0.17%, France’s CAC 40 fell 0.15%, while Germany’s DAX 30 retreated 0.70%.

European equities were under pressure after ECB President Draghi on Thursday confirmed that the bank left its benchmark interest rate unchanged at 0.5%, with the latest economic data indicating that “the moderate economic recovery in the euro zone is proceeding.”

Draghi reiterated the ECB’s forward guidance on rates, saying that interest rates will remain at their present levels, or lower for an extended period. The ECB remains determined to maintain the high degree of accommodative monetary policy for as long as needed, and will take further actions as it sees fit, he added.

The central bank revised its forecast for economic growth in 2014 to 1.2% from 1.1% in December.

However, the bank revised down its inflation forecast for this year to 1.0% from 1.1% in December. The bank expects inflation to pick up to 1.3% in 2015 and 1.5% in 2016, remaining below the bank’s target of just under 2%.

Financial stocks were mixed, as BNP Paribas eased 0.05% and Societe Generale added 0.14% in France, while Germany's Deutsche Bank slid 0.37%.

Among peripheral lenders, Unicredit and Intesa Sanpaolo fell 0.21% and 0.26% respectively, while Spanish banks Banco Santander and BBVA rose 0.28% and 0.58%.

Elsewhere, Telecom Italia SpA tumbled 1.13% after scrapping its dividend for common shares for the first time in its history as a public company.

Fugro NV added to losses, down 5.89%, after the deepwater-oilfield surveyor reported revenue for 2013 that missed market expectations.

In London, FTSE 100 declined 0.36%, as U.K. lenders tracked their European counterparts lower.

Shares in Lloyds Banking slipped 0.15% and Barclays fell 0.19%, while HSBC Holdings retreated 0.58%. The Royal Bank of Scotland overperformed on the other hand, edging up 0.09%.

Mining stocks were also mostly lower, as Glencore Xstrata dropped 0.83% and Rio Tinto tumbled 1.12%, while BHP Billiton and Polymetal lost 0.66% and 1.02% respectively.

AstraZeneca Plc was also on the downside, slipping 0.20%, even after saying Nexium pills made with an ingredient from an Indian plant that failed regulatory inspections are safe to use and haven’t been removed from the U.S. marketplace.

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.06% rise, S&P 500 futures signaled a 0.05% gain, while the Nasdaq 100 futures indicated a 0.01% dip.

Later in the day, Germany is to publish data on industrial production. The U.S. was to release government data on nonfarm payrolls and the unemployment rate.

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