MW:Europe stocks wobble as ECB leaves rates unchanged
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets edged higher Thursday as the European Central Bank and the Bank of England kept their respective interest rates on hold, with attention now turning to the ECB’s monthly news conference.
The Stoxx Europe 600 index XX:SXXP +0.09% rose 0.1% to 271.62, swinging between small gains and losses.
Among notable movers, Nobel Biocare Holding AG CH:NOBN -6.67% slumped 7%, after saying a further deterioration in its Japanese market will materially affect revenue and profit for 2012.
As had been widely expected, central banks were in focus after the ECB left its key lending rate unchanged at 0.75%. Attention now turns to the news conference featuring ECB President Mario Draghi, at 8:30 a.m. Eastern.
At the September meeting, Draghi unveiled much-anticipated details of a unlimited bond-buying program, which spurred a risk rally in bonds and stock markets. See: ECB chief Mario Draghi’s hands are tied
Analysts at Deutsche Bank “expect a ‘wait and see’ mantra from the ECB at least until the end of the year and see the central bank waiting until [first quarter] next year before delivering one 25 basis point refi rate cut,” they said in a note.
The Bank of England kept its key interest rate unchanged at a record-low 0.5% and made no changes to its 375 billion pounds ($604.3 billion) asset purchase program.
Spanish auction
Spain was also in the spotlight, after the government sold 3.992 billion euros ($5.17 billion), close to its €4 billion top-end target, in short- and medium-term bonds. Borrowing costs dropped for most maturities, while demand rose across the board. See: Yields drop, demand rises at Spanish bond auction
In the secondary market, the yield on 10-year Spanish government bonds ES:10YR_ESP +1.16% rose 6 basis points to 5.82%, according to electronic trading platform Tradeweb.
The IBEX 35 index XX:IBEX -0.0026% traded 0.2% lower at 7,813.70.
Elsewhere, energy shares lost ground. BP PLC BP -1.08% UK:BP -1.45% traded off 1.3% in London, dragging the sector lower. A representative from BP Azerbaijan told Reuters that the gas flows from Azeri Shah Deniz fields to Turkey were halted last Wednesday night due to “an incident.”
“We have seen a progressive dip in the oil price over the last few sessions and today we have the news on BP, which is negative for the sector,” said Atif Latif, director of trading at Guardian Stockbrokers.
Norway’s Statoil ASA NO:STL -1.29% gave up 1.4%, France’s Total SA TOT -1.48% FR:FP -1.24% lost 0.8% and Italy’s ENI SpA IT:ENI -0.58% fell 0.6%.
BG Group PLC UK:BG -0.11% dropped 0.2% in London, while Royal Dutch Shell PLC UK:RDSB -0.64% RDS.B -0.64% lost 0.7%.
The FTSE 100 index UK:UKX +0.11% rose 0.1% to 5,829.42, with HSBC Holdings PLC UK:HSBA +0.63% HBC +0.62% HK:5 +1.79% up 0.6%.
French stocks traded mixed, although Société Générale SA FR:GLE +0.82% gained 1.4%. The CAC 40 index FR:PX1 +0.17% was 0.1% higher at 3,410.59.
In Germany, the DAX 30 index DX:DAX +0.01% was slightly higher at 7,322.72, with Deutsche Telekom AG DE:DTE -1.63% down 1.9% as UBS lowered the firm’s earnings-per-share forecast for 2014 by 4%.
Volkswagen AG DE:VOW3 +1.26% DE:VOW +1.46% added 1.5% after deliveries at its premium brand, Audi, rose 20%, in China in September. See: Audi-brand car deliveries in China up 20%
Sara Sjolin is a MarketWatch reporter, based in London.
