European Markets Finished Mixed After ECB Leaves Rates Unchanged

(RTTNews) - The European markets concluded Thursday's choppy trading session with mixed results. Energy stocks were under pressure after the OPEC meeting in Vienna failed to result in an agreement to cap production. Investors were in a cautious mood ahead of the release of the U.S. jobs report for May on Friday. The report could have a significant impact on the outlook for whether the Federal Reserve raises interest rates later this month.

The main focus for investors was today's announcement from the European Central Bank. The ECB left interest rates unchanged for a second policy session in a row on Thursday, as policymakers hope that the already announced stimulus measures will boost the euro area growth and inflation in the coming months.

The 25-member Governing Council, led by ECB President Mario Draghi, left the benchmark interest rate - the refi, unchanged at a record low zero percent, after the policy session in Vienna. The refi was kept unchanged in April, after a surprise five-basis point reduction in March.

The deposit rate was held steady at -0.40 percent, following a 10 basis points reduction in March. The marginal lending facility rate was kept at 0.25 percent, after a five basis point-cut in March.

The central bank also announced that it will start making purchases under the corporate sector purchase programme, or CSPP, on June 8. The ECB will also conduct the first operation in its new series of targeted longer-term refinancing operations, or TLTRO, on June 22.

The European Central Bank raised its euro area growth and inflation forecasts for this year, while expressing concern over downside risks such as "Brexit", and reiterated its willingness to act when needed.

The latest ECB Staff macroeconomic projections unveiled by ECB President Mario Draghi in Vienna on Thursday showed an upward revision in the Eurozone inflation forecast for this year to 0.2 percent from 0.1 percent seen in March.

Inflation projections for next year and 2018 were retained at 1.3 percent and 1.6 percent, respectively.

"The risks to the euro area growth outlook remain tilted to the downside, but the balance of risks has improved on the back of the monetary policy measures taken and the stimulus still in the pipeline," Draghi said.

"Downside risks continue to relate to developments in the global economy, to the upcoming British referendum and to other geopolitical risks."

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.16 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.05 percent.

The DAX of Germany climbed 0.03 percent and the CAC 40 of France fell 0.21 percent. The FTSE 100 of the U.K. declined 0.10 percent and the SMI of Switzerland finished higher by 0.25 percent.

In Frankfurt, Volkswagen increased 1.78 percent. BMW rose 0.16 percent and Daimler added 0.43 percent.

RWE advanced 1.58 percent and peer E.ON gained 0.70 percent.

In Paris, Technip dropped 1.97 percent and Total fell 1.60 percent.

Peugeot climbed 1.71 percent and Renault added 0.53 percent. Car parts market Valeo also finished higher by 1.82 percent.

In London, Johnson Matthey climbed 5.94 percent. The specialty chemicals maker forecast better results in the coming year after reporting a 22 percent drop in full fiscal year pretax profit.

Building materials supplier Wolseley dropped 1.10 percent on brokerage downgrades.

Aerospace and defense specialist Cobham sank 15.43 percent after launching a rights issue at a deep discount to its closing price on May 31.

Steel producer Voestalpine climbed 4.33 percent in Vienna on solid full-year results.

Eurozone producer prices dropped unexpectedly in April on falling energy prices, Eurostat showed Thursday. Producer prices dropped 0.3 percent in April from March, confounding expectations for a 0.1 percent rise. Prices had increased 0.3 percent in March.

Spanish unemployment declined further in May to reach below 4 million for the first time in nearly six years, preliminary data from the Labor Ministry showed Thursday. The number of unemployed dropped by 119,768 persons month-on-month to 3.89 million. The figure fell below 4 million for the first time since August 2010, the ministry said.

The U.K. construction sector experienced another difficult month as output growth eased to its weakest level for almost three years, survey data from Markit showed Thursday. The construction Purchasing Managers' Index fell to 51.2 in May from 52.0 in April. It was forecast to remain unchanged at 52.

Payroll processor ADP released a report Thursday morning showing that private sector employment in the U.S. increased roughly in line with economist estimates in the month of May. The report said private sector employment rose by 173,000 jobs in May after climbing by an upwardly revised 166,000 jobs in April.

Economists had expected employment to increase by about 175,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.

A day before the release of the closely watched monthly jobs report, the Labor Department released a report on Thursday showing a modest drop in first-time claims for U.S. unemployment benefits in the week ended May 28th.

The report said initial jobless claims edged down to 267,000, a decrease of 1,000 from the previous week's unrevised level of 268,000. Economists had expected jobless claims to inch up to 270,000.