- Turkish central bank raises interest rates
- Irish central bank revises GDP estimates
- German consumer confidence rises
- Fed to announce possible taper
FTSE 100: 0.13%
CAC 40: -0.10%
FTSE MIB: 0.06%
IBEX 35: 0.96%
Stoxx 600: 0.04%
European stocks were little changed after Turkey's central bank raised interest rates to stop a currency slide.
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%.
The move sent the lira sharply higher against the dollar
and surpassed analysts' estimates.
Turkey's announcement comes amid a drop in the lira and currencies in other emerging markets (EM).
"Turkey's decision last night is likely to cause a relief rally in global risk assets, and EM assets in particular," Royal Bank of Scotland said.
In another lift to markets, 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.
Fed to announce policy decision
Analysts expect the US Federal Reserve will announce a further $10bn stimulus cut when it wraps up its policy meeting later today.
In December the central bank began to trim monthly asset purchases by $10bn to $75bn.
Today's expected taper comes despite fears that it would hamper global economic recovery amid the recent turbulence in developing countries.
"However, the action taken by the Turkish central bank should significantly reduce the capital outflows and even draw some money back into the country," Craig Erlam, Market Analyst at Alpari said.
"If other countries follow suit, this should re-stabilise the markets at a time when further Fed tapering is widely expected."
Morgan Stanley sees China as the greatest threat to emerging markets, according to the Financial Times. The broker said a slowdown in the world's second largest economy will have spill-over effect on other countries.
Antofagasta edged higher after the copper company said output climbed to a record 721,200 metric tonnes in 2013.
Mulberry Group declined after the British luxury-handbag maker said full-year pre-tax profit will be substantially below current market estimates.
Anglo American rallied after reporting a 25% increase in fourth-quarter platinum production.
Lloyds Banking Group rose following a report that the lending will go ahead with an initial public offering of TSB.
Fiat declined after the carmaker posted fourth quarter earnings the missed analysts' estimates.
The euro fell 0.07% to $1.3661.
Brent crude futures edged up $0.177 to $107.600 per barrel, according to data from the ICE.