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European stocks decline, focus on central banks; Dax down 0.11%

Stock MarketsJun 05, 2014 03:31AM ET
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European stocks open lower ahead of BoE, ECB statements - European stocks were lower on Thursday, as markets were jittery ahead of the European Central Bank and the Bank of England's policy statements, due later in the trading session.

During European morning trade, the DJ Euro Stoxx 50 fell 0.22%, France’s CAC 40 slipped 0.24%, while Germany’s DAX edged down 0.11%.

Investors remained cautious after data earlier in the week showed that consumer price inflation in the euro zone increased by 0.5% last month, down from 0.7% in April. The rate missed expectations for a reading of 0.7% and stands well below the ECB target of near but just under 2%.

The report added to expectations that the ECB will take steps to tackle low consumer price growth, which is threatening the fragile recovery in the euro zone.

Financial stocks were broadly lower, as French lenders Societe Generale (PARIS:SOGN) and BNP Paribas (PARIS:BNPP) slipped 0.21% and 0.17%, while Germany's Deutsche Bank (XETRA:DBKGn) shed 0.30%.

Among peripheral lenders, Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) fell 0.23% and 0.63% respectively. Italy's Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) overperformed on the other hand, rising 0.29% and 0.31%.

Volvo (ST:VOLVAs) added to losses, tumbling 1.08%, after UBS recommended selling the shares.

Elsewhere, Deutsche Telekom (XETRA:DTEGn) gained 0.57% amid reports U.S. rival Sprint (NYSE:S) is nearing an agreement on the price, capital structure and termination fee of an acquisition for T-Mobile US (NYSE:TMUS). Deutsche Telekom, which owns a 67% stake in T-Mobile, would be left with about 15% of the combined company.

In London, FTSE 100 slid 0.23%, as U.K. lenders tracked their European counterparts broadly lower.

Shares in Lloyds Banking (LONDON:LLOY) edged down 0.16% and HSBC Holdings (LONDON:HSBA) shed 0.31%, while Barclays (LONDON:BARC) and the Royal Bank of Scotland (LONDON:RBS) declined 0.35% and 0.24% respectively.

Mining stocks were also on the downside, as Glencore Xstrata (LONDON:GLEN) retreated 0.42% and Rio Tinto (LONDON:RIO) lost 0.53%, while Vedanta Resources (LONDON:VED) and Bhp Billiton (LONDON:BLT) dropped 0.87% and 0.96%.

Meanwhile, Smith & Nephew (LONDON:SN) led gains on the index, with shares surging 5.83% following reports Medtronic (NYSE:MDT) is considering a takeover of the U.K. maker of medical devices.

In the U.S., equity markets pointed to a steady open. The Dow 30 futures pointed to a 0.03% gain, S&P 500 futures signaled a 0.02% dip, while the Nasdaq 100 futures indicated a 0.01% downtick.

Also Thursday, data showed that German factory orders rose 3.1% in April, beating expectations for a 1.3% increase, after a 2.8% decline the previous month.

Later in the day, the ECB was to announce its benchmark interest rate, followed by a press conference with President Mario Draghi. The U.S. was to publish the weekly report on initial jobless claims.

European stocks decline, focus on central banks; Dax down 0.11%

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