- ECB and BoE keep policy on hold
- Eurozone economic confidence improves
- US initial jobless claims fall
FTSE 100: -0.46%
CAC 40: -0.87%
FTSE MIB: 0.21%
IBEX 35: -0.29%
Stoxx 600: -0.44%
European stocks were mixed after European Central Bank (ECB) President Mario Draghi strengthened his pledge to keep interest rates low for an "extended period of time".
Draghi's comments came at a press conference after the ECB announced it will hold the benchmark interest rate at 0.25%.
He also said the ECB expects a prolonged period of low inflation before prices begin to gradually rise "later on".
A sharp fall in inflation prompted the ECB to cut interest rates to 0.25% from 0.5% late last year.
Draghi said high unemployment, currently at 12.1%, would continue to weigh on recovery but inflation would slowly edge closer towards the central bank's target of close to and under 2%.
The Bank of England also announced its policy decision today, holding interest rates at 0.50% and asset purchases at £375bn.
The BoE has vowed to keep interest rates at their record low at least until the unemployment rate drops to 7%.
With unemployment falling to 7.4% in the three months to October, some believe the Bank's Monetary Policy Committee (MPC) is likely to raise the rate soon. The proportion of economists expecting a rise this year has jumped from close to 20% in December to nearly 50% this month, according to Reuters.
Eurozone economic confidence rises
The European Commission's index of executive and consumer sentiment jumped to 100 in December from 98.4 in November, surprising analysts who expected a reading of 99.1. It marked the highest reading since July 2011.
In the US, the Labor Department revealed initial weekly claims for unemployment benefits dropped by 15,000 to 330,000 from an upwardly revised 345,000 in the month before. Economists had pencilled in a figure of around 335,000.
The report comes ahead of the highly anticipated US non-farm payrolls and jobless rate tomorrow as the Federal Reserve's next policy meeting looms.
The market is watching labour market data closely to weigh whether the Fed will announce a further tapering this month after announcing in December that it would begin scaling back monthly bond purchases by $10bn to $75bn.
Arkema tumbled after the French chemical company cut its full-year earnings forecast to around €900m from a previous estimate of €920m.
Tesco declined after reporting a fall in like-for-like Christmas sales that missed expectations.
Rival supermarket Morrison also retreated after saying underlying operating profit for the year will be at the lower end of a cited range of £783m to £853m after a challenging Christmas.
Standard Chartered was lower after announcing Chief Financial Officer Richard Meddings and Steve Bertamini, Head of Consumer banking, will step down.
Waertsilae was up after Rolls-Royce said that it has ended initial talks to buy the Finnish maker of engines for tankers, cruise ships and navy vessels.
TGS Nopec Geophysical Co. rallied after the Norway surveyor of underwater oil and gas fields raised its annual revenue projection to around $882m from an earlier forecast of between $810m to $870m.
AstraZeneca gained after the Food and Drug Administration approved dapagliflozin, a treatment for Type 2 diabetes.
Genel Energy bounced as HSBC upgraded its rating on the shares
to 'overweight' from 'neutral'.
The euro rose 0.13% to $1.3593.
Brent crude futures jumped $0.047 to 107.200 per barrel, according to the ICE.