Forexpros – European stocks turned lower on Thursday, as fresh concerns over the outlook for growth in the euro zone dampened market sentiment, while investors remained cautious amid speculation the European Central Bank could take further action to boost the economy.
During European afternoon trade, the EURO STOXX 50 declined 0.30%, France’s CAC 40 inched down 0.07%, while Germany’s DAX 30 dropped 0.54%.
Sentiment waned after the ECB said in its monthly bulletin that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
Meanwhile, optimism that the ECB will soon move to lower high Spanish and Italian borrowing costs seemed to fade as investors waited for more details of the bank’s proposed bond buying program to emerge.
Financial stocks were mixed, trimming some of the morning’s gains, as shares in French lenders Societe Generale and BNP Paribas rose 1.33% and 0.41%, while Germany’s Deutsche Bank and Commerzbank retreated 0.12% and 4.21% respectively.
Earlier in the day, Commerzbank said that net income in the second half of 2012 will fall below profit in the first half of the year. Germany’s second-largest lender also reported better-than-expected second-quarter net income.
Elsewhere, Nestle saw shares rally 3.48% after posting first-half sales growth that exceeded analysts’ projections.
On the downside, French energy giant GDF Suez tumbled 2.51% following reports Belgium halted one of its seven nuclear reactors on suspicion that one of its components might be cracked.
GDF Suez, which operates Belgian nuclear plants through its unit Electrabel, confirmed that the reactor will remain closed.
In London, FTSE 100 eased -%, after official data showed that the U.K. trade deficit widened more than expected in June.
Standard Chartered remained sharply higher for the second consecutive session, surging 3.74%, after plummeting earlier in the week, as CEO Peter Sands hit back at a New York regulator’s claims the bank broke U.S. sanctions, and said he saw “no grounds” for revoking the lender’s license.
The U.K. lender is accused of scheming with the Iranian government to launder billions of dollars to potentially support terrorist activities.
Meanwhile, other financial stocks were mixed. Shares in the Royal Bank of Scotland plummeted 1.83% and HSBC Holdings added 0.10%, while Lloyds Banking and Barclays rose 0.22% and 0.27% respectively.
In the U.S., equity markets pointed to a mixed open. The Dow Jones Industrial Average futures pointed to a 0.07% rise, S&P 500 futures signaled a 0.06% fall, while the Nasdaq 100 futures indicated a 0.15% gain.
Later in the day, the U.S. was to publish official data on the trade balance and initial jobless claims.
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