- Eurozone industrial output falls
- ECB reiterates interest rate guidance
- US holds off on Syria military strike
FTSE 100: -0.07%
CAC 40: -0.36%
FTSE MIB: -0.34%
IBEX 35: 0.22%
Stoxx 600: -0.14%
European stocks slid following a report which showed Eurozone industrial production fell more than expected in July.
Factory output in the 17-nation region dropped 1.5% compared to June's 0.3% increase, missing the consensus for a 0.2% decline, according to Eurostat.
In Germany, Europe's largest economy, industrial production was down 2.3% in July from June.
The report sparked concerns among traders that the Eurozone is headed for a bigger slump.
It came as European Central Bank President Mario Draghi reaffirmed the monetary authority's forward guidance on interest rates, saying it expected them to remain "at present or lower levels for an extended period".
The bank left its key rate unchanged at 0.5% last week but Draghi said policymakers had toyed with a possible rate cut, due to concern about money market rates and the uncertain nature of the recovery.
ECB member Jorg Asmussen said the Eurozone was not ready for an end to loose monetary policy.
"A quick change in monetary policy would definitely come much too soon for the Eurozone economy," Asmussen told financial daily Boersen-Zeitung.
Syria tensions ease on delayed US force
The US has said it would consider Russia's proposal to have Syria hand over its chemical weapons to international control in exchange for avoiding military action.
The White House said it would pursue talks despite scepticism from US lawmakers that Syria would accept Russia's plans, which have now been handed over to the US.
President Barack Obama has called for a military strike if diplomacy failed after Syrian President Bashar Hafez al-Assad's regime allegedly used chemicals weapons against civilians on August 21st.
"The news that Syria is willing to give up its chemical weapons to the international community to be destroyed and that the US is willing to consider this has provided a major boost to the markets," said Craig Erlam, Market Analyst at Alpari Research.
"As we can see by the approval ratings in most countries, people do not want another war and this provides an alternative. Obviously, it's unlikely to be plain sailing from here, with complications arising along the way, but this is an encouraging development from last week."
Électricité de France's shares
fell after Norges Bank launched the sale of a €289m euro stake in the utility company on Wednesday evening.
RWE declined following a report that the utility may cut its dividend.
Morrison Supermarkets advanced after raising its dividend and saying its restructuring plan was on track as it reported half-year results.
Sanofi plunged after withdrawing a US application for a diabetes drug.
Other asset classes rise
Brent crude futures jumped $0.686 to $112.270 per barrel on the ICE.
The euro increased 0.05% to the 1.0324 US dollar.