- Positive US data points to Fed stimulus cut
- BoE and ECB keep policy on hold
- Osborne unveils reforms in Autumn Statement
FTSE 100: -0.18%
CAC 40: -1.17%
FTSE MIB: -1.75%
IBEX 35: -1.45%
Stoxx 600: -0.89%
European equities slumped after the release of upbeat US data fuelled concerns that the Federal Reserve will begin reducing monetary stimulus at its next meeting.
US initial weekly jobless claims fell to 298,000 in the week ended November 30th, compared with a total of 321,000 the previous week and well below the consensus forecast for a reading 320,000.
US gross domestic product growth expanded at an annual pace of 3.6% in the third quarter, the strongest growth registered in a year and a half. This was revised up from the initial 2.8% estimate and well ahead of the 2.5% expansion in the second quarter.
The positive reports increase the likelihood that the central bank could announce a tapering of its monthly $85bn bond buying programme as soon as its policy meeting on December 17th and 18th.
The key release, however, will be non-farm payrolls tomorrow which is expected to fall to 183,000 in November from 204,000 in October, according to consensus.
The unemployment rate is tipped to fall to 7.2% from 7.3%.
ECB and BoE keep policy unchanged
The European Central Bank (ECB) announced today that it would maintain its current policy, including its benchmark interest rate of 0.25%.
The move was expected and followed last month's surprise decision to cut the rate from 0.5%.
Addressing reporters after the ECB's announcement, President Mario Draghi reiterated that the central bank stands "ready to act" to resolve extreme scenarios in the Eurozone.
The BoE, as predicted, kept its policy on hold, maintaining its benchmark interest rate at 0.50% and asset purchases at £375bn.
The Bank has vowed that it will not consider raising the rate until employment reaches at least 7%. Even then the central bank will not necessarily raise interest rates, BoE Governor Mark Carney has stressed.
Elsewhere in the UK, Chancellor George Osborne revealed in his Autumn Statement that economic growth this year has been twice as good as expected.
He announced a series of fiscally-neutral measures intended, to use his own words, "to fix the roof while the sun is shining". The government will place a new cap on social security spending from next year, although state pensions will be excluded.
The pension age will also rise to 68 by the mid 2030s and 69 by the late 2040s.
FLSmidth & Co, Metro
FLSmidth & Co. A/S slumped as the Danish mining-equipment maker lowered its forecast earnings margin.
Metro AG fell as Morgan Stanley lowered its rating of Germany's biggest retailer to 'equal weight' from 'overweight'.
Luxembourg-based and London-listed AZ Electronic Materials advanced after Merck KGaA agreed to buy the company for about £1.6bn.
Vienna Insurance Group AG dropped as an undisclosed seller offered 2.29m shares
in the company.
Remy Cointreau SA gained after the maker of Remy Martin cognac said its board has authorised a buyback of up to 2.5m shares.
The euro rose 0.55% to $1.3668.
Brent crude futures fell $0.359 to $111.480 per barrel, according to the ICE.