Investing.com - European stocks were lower on Thursday, as investors remained cautious ahead of highly anticipated remarks by Federal Reserve Chairman Ben Bernanke later in the day, for indications on the bank’s next policy moves.
During European morning trade, the EURO STOXX 50 dropped 0.56%, France’s CAC 40 declined 0.62%, while Germany’s DAX 30 retreated 0.43%.
Markets were eyeing the outcome of the Fed’s policy meeting later Thursday, amid growing speculation that the U.S. central bank may implement a third round of quantitative easing to bolster growth.
Stocks rallied on Wednesday, after Germany’s constitutional court approved the country’s participation in the euro zone’s bailout fund, the European Stability Mechanism.
The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.
The German court said that the country’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
Financial stocks were broadly lower, as shares in French lenders Societe Generale and BNP Paribas tumbled 1.74% and 1.10%, while Germany’s Deutsche Bank and Commerzbank declined 0.79% and 1.08%.
Peripheral lenders also posted sharp losses, with Spanish banks BBVA and Banco Santander plummeting 1.66% and 1.18%, while Italy’s Unicredit and Intesa Sanpaolo both retreated 1.10%.
Elsewhere, France-based EADS plunged 6.27% after the company said on Wednesday that it has entered talks for a tie-up with the U.K.’s BAE Systems to build an equal to Boeing that would balance civil and defense operations. Shares in BAE dove 5.13% following the news.
In London, FTSE 100 fell 0.15%, as U.K. lenders tracked their European counterparts lower.
Shares in Lloyds Banking plunged 2.03% and the Royal Bank of Scotland tumbled 1%, while Barclays and HSBC Holdings dropped 0.68% and 0.54%.
Mining giants Rio Tinto and BHP Billiton also added to losses, with shares plummeting 1.30% and 1.14%, while copper producers Xstrata and Kazakhmys slumped 0.76% and 1.84% respectively.
On the upside, WPP, the world’s biggest advertising agency, rose 0.99% after the stock was raised to hold from underperform at Jefferies.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.23% fall, S&P 500 futures signaled a 0.27% decline, while the Nasdaq 100 futures indicated a 0.32% loss.
Later in the day, the U.S. was to publish government data on producer price inflation, as well as a weekly report on initial jobless claims.
The Federal Reserve was to announce its benchmark interest rate, followed by comments by Chairman Ben Bernanke.
During European morning trade, the EURO STOXX 50 dropped 0.56%, France’s CAC 40 declined 0.62%, while Germany’s DAX 30 retreated 0.43%.
Markets were eyeing the outcome of the Fed’s policy meeting later Thursday, amid growing speculation that the U.S. central bank may implement a third round of quantitative easing to bolster growth.
Stocks rallied on Wednesday, after Germany’s constitutional court approved the country’s participation in the euro zone’s bailout fund, the European Stability Mechanism.
The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.
The German court said that the country’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
Financial stocks were broadly lower, as shares in French lenders Societe Generale and BNP Paribas tumbled 1.74% and 1.10%, while Germany’s Deutsche Bank and Commerzbank declined 0.79% and 1.08%.
Peripheral lenders also posted sharp losses, with Spanish banks BBVA and Banco Santander plummeting 1.66% and 1.18%, while Italy’s Unicredit and Intesa Sanpaolo both retreated 1.10%.
Elsewhere, France-based EADS plunged 6.27% after the company said on Wednesday that it has entered talks for a tie-up with the U.K.’s BAE Systems to build an equal to Boeing that would balance civil and defense operations. Shares in BAE dove 5.13% following the news.
In London, FTSE 100 fell 0.15%, as U.K. lenders tracked their European counterparts lower.
Shares in Lloyds Banking plunged 2.03% and the Royal Bank of Scotland tumbled 1%, while Barclays and HSBC Holdings dropped 0.68% and 0.54%.
Mining giants Rio Tinto and BHP Billiton also added to losses, with shares plummeting 1.30% and 1.14%, while copper producers Xstrata and Kazakhmys slumped 0.76% and 1.84% respectively.
On the upside, WPP, the world’s biggest advertising agency, rose 0.99% after the stock was raised to hold from underperform at Jefferies.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.23% fall, S&P 500 futures signaled a 0.27% decline, while the Nasdaq 100 futures indicated a 0.32% loss.
Later in the day, the U.S. was to publish government data on producer price inflation, as well as a weekly report on initial jobless claims.
The Federal Reserve was to announce its benchmark interest rate, followed by comments by Chairman Ben Bernanke.