- Turkey and India central banks raise interest rates
- Irish central bank revises GDP estimates
- German consumer confidence rises
- Fed to announce possible taper
FTSE 100: -0.43%
CAC 40: -0.68%
FTSE MIB: -0.57%
IBEX 35: 0.17%
Stoxx 600: 0.57%
European stocks were mostly lower as emerging market currencies erased initial gains after the Turkish central bank's decision to hike interest rates.
At an emergency meeting yesterday the Turkish central bank lifted its overnight lending rate to 12% from 7.75%, its one-week repo rate to 10% from 4.5% and its overnight borrowing rate to 8% from 3.5%.
However, the bank's move failed to soothe concerns that Turkey's economy will be left by a slowdown in China. The lira rose 4% on first reaction to the news of the interest rate increase before depreciating as much as 2.4%.
According to JPMorgan, China remains the biggest risk to emerging markets.
In the bank's latest Global Data Watch, JPMorgan noted the spillover effects from a possible disruption in China's shadow banking system.
"Rising interbank rates, as liquidity is kept tight, continues to push up borrowing costs and, along with the slower growth, risks amplifying financial stress," economists said.
India's central bank has also unexpectedly raised interest rates in an effort to curb high inflation. The Reserve Bank of India (RBI) raised the benchmark repo rate - the amount at which it charges to lend to commercial banks - to 8% from 7.75%.
German consumer confidence, Irish GDP
German consumer confidence rose more than expected. GfK's forward-looking consumer sentiment index jumped to 8.2 in February from 7.7 the prior month, the highest since August 2007. Economists had predicted a drop to 7.6.
In Ireland, the central bank revised its gross domestic product (GDP) estimate higher, driven by expectations of strength in external demand. In its Quarterly Bulletin published on Wednesday, the Irish monetary authority revised GDP growth for last year to 0.4%, from the prior 0.5%, while slightly increasing its forecast for 2014 to 2.1%, from the previous 2.0% estimate.
Federal Reserve policy
Analysts expect the US Federal Reserve will announce a further $10bn stimulus cut when it wraps up its policy meeting after the European close.
In December the central bank began to trim monthly asset purchases by $10bn to $75bn.
Today's meeting marks Ben Bernanke's last as Chairman before handing the baton over to Janet Yellen.
Nordea Bank, Fiat
Nordea Bank dropped after its Chief Executive Christian Clausen said it will need to cut more jobs to adjust to slow growth.
Fiat was down after the car maker posted fourth quarter earnings the missed analysts' estimates.
Mulberry Group declined after the British luxury-handbag maker said full-year pre-tax profit will be substantially below current market estimates.
Antofagasta edged higher after the copper company said output climbed to a record 721,200 metric tonnes in 2013.
Vodafone Group jumped following reports AT&T is still interested in a potential takeover of the mobile-phone operator.
Anglo American rallied after reporting a 25% increase in fourth-quarter platinum production.
The euro fell 0.07% to $1.3662.
Brent crude futures edged up $0.353 to $107.790 per barrel, according to data from the ICE.