European Markets Dropped On Bank Weakness

(RTTNews) - The European markets got off to a positive start Thursday, but then quickly reversed, falling solidly into negative territory. Early strength was attributed to rising commodity prices, which provided a boost to energy and mining stocks. However, weakness in bank stocks drove the markets into the red.

Bank of England policymakers unanimously decided to maintain the interest rate and the asset purchase programme amid heightened uncertainty ahead of the EU referendum in June.

The Monetary Policy Committee, headed by Mark Carney, voted 9-0 to hold the interest rate at 0.50 percent, the BoE said in a statement.

The decision marked the 7th anniversary of the key rate at the current 0.50 percent. McCafferty dropped his call for a quarter point rate hike last month for the first time since July 2015.

Policymakers also unanimously voted to maintain quantitative easing at GBP 375 billion.

The Swiss National Bank retained its negative interest rate and repeated that it will be active in the foreign exchange market as the Swiss franc remains significantly overvalued.

The interest rate on sight deposits at the central bank was maintained at -0.75 percent, and the target range for the three-month libor between -1.25 percent and -0.25 percent.

The State Secretariat for Economic Affairs downgraded its Switzerland's growth projections as there is no clear sign of a marked acceleration in global growth.

In the Spring forecast, the expert group of SECO said it does not expect a marked and quick acceleration in the growth of the Swiss economy over the coming quarters.

The economy is forecast to grow 1.4 percent this year, instead of 1.5 percent projected in December. For 2017, the agency trimmed outlook to 1.8 percent from 1.9 percent.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.62 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.55 percent.

The DAX of Germany dropped 0.91 percent and the CAC 40 of France fell 0.45 percent. The FTSE 100 of the U.K. gained 0.42 percent, but the SMI of Switzerland finished lower by 0.69 percent.

In Frankfurt, Deutsche Lufthansa sank 4.58 percent after the airline group issued a cautious outlook for 2016.

Commerzbank dropped 2.44 percent and Deutsche Bank fell 2.38 percent.

BMW declined 2.19 percent and Daimler lost 1.77 percent.

In Paris, BNP Paribas decreased 2.30 percent and Societe Generale fell 1.86 percent. Credit Agricole also finished down by 0.54 percent.

Renault declined 1.65 percent and Peugeot lost 1.77 percent. Car parts maker Valeo also closed lower by 1.87 percent.

Technip climbed 3.55 percent and Total rose 2.34 percent.

In London, Rio Tinto climbed 5.42 percent. The company announced that Jean-Sébastien will succeed CEO Sam Walsh, who will retire from the business on July 1.

The rest of the miners also benefitted from rising commodity prices. Anglo American jumped 9.78 percent and Glencore surged 9.49 percent. Antofagasta leaped 8.28 percent and Fresnillo climbed 9.45 percent. BHP Billiton advanced 7.68 percent and Randgold Resources added 7.77 percent.

GlaxoSmithKline decreased 0.89 percent, after it announced that its CEO, Sir Andrew Witty, intends to retire from the company in early 2017.

Premier Farnell plunged 3.70 percent. The technology products distributor slashed its final dividend after posting sluggish second-half results.

InterContinental Hotels Group dropped 2.03 percent after Morgan Stanley downgraded it to "Equal-weight" from "Overweight."

LafargeHolcim rose 1.94 percent in Zurich. The cement giant maintained dividend after posting a fourth-quarter loss of 2.86 billion Swiss francs, hit by write-down and other charges.

Eurozone consumer prices declined for the first time in five months in February as initially estimated, final data from Eurostat showed Thursday. The harmonized index of consumer prices fell 0.2 percent year-on-year following a 0.3 percent rise in January. The annual rate matched the flash estimate published on February 29.

Eurozone trade surplus declined to a 3-month low in January as the pace of decline in exports was bigger than the fall in imports, Eurostat reported Thursday. The trade surplus decreased to a seasonally adjusted EUR 21.2 billion from EUR 22.5 billion in December. This was the lowest level since October, when surplus totaled EUR 19.5 billion.

Initial jobless claims in the U.S. rebounded by less than expected in the week ended March 12th, according to a report released by the Labor Department on Thursday. The Labor Department said jobless claims rose to 265,000, an increase of 7,000 from the previous week's revised level of 258,000.

Economists had expected jobless claims to climb to 270,000 from the 259,000 originally reported for the previous week.

Philadelphia-area manufacturers reported an unexpected improvement in business conditions in the month of March, the Federal Reserve Bank of Philadelphia revealed on Thursday. The Philly Fed said its diffusion index for current activity jumped to a positive 12.4 in March from a negative 2.8 in February, with a positive reading indicating growth in regional manufacturing activity.

The index recorded its first positive reading in seven months, while economists had expected a much more modest increase to a negative 1.4.

A reading on leading U.S. economic indicators inched up by slightly less than expected in the month of February, according to a report released by the Conference Board on Thursday. The Conference Board said its leading economic index ticked up by 0.1 percent in February after dipping by 0.2 percent in January. Economists had expected the index to rise by 0.2 percent.