European Markets Finished With Mixed Results

(RTTNews) - The European markets ended Friday's session with mixed results, although there were more markets in the red than in the green. The markets continued to struggle with yesterday's announcement from the European Central Bank. The European markets dropped sharply Thursday due to investor disappointment that the central bank did not announce more aggressive stimulus measures.

Investor expectations regarding this month's European Central Bank policy session were wrong, the bank's Vice President Vitor Constancio said Friday.

In an interview to the CNBC, Constancio said, "We have to recognize that the markets got it wrong in forming their expectations."

"They did indeed have higher expectations than were there and that's why they reacted like they reacted but that was not our intention."

In its latest attempt to kindle inflation in the euro area and underpin feeble growth, the ECB on Thursday cut its deposit rate by 10 basis points to -0.30 percent and extended its asset purchase programme until at least March 2017. The bank also broadened its asset purchases to include regional and local government bonds among other measures.

Germany's economic growth is set to pick up in the coming year as exports are expected to recover, the Bundesbank said Friday.

The biggest euro area economy is set to expand 1.7 percent this year and 1.8 percent next year, the bank said in its bi-annual projections, retaining earlier forecasts. The outlook for 2017 was raised to 1.7 percent from 1.5 percent seen in June.

On a working-day adjusted basis, growth was projected to be 1.7 percent in 2016 and 1.9 percent in 2017, following 1.5 percent this year.

Inflation was forecast to accelerate as the dampening effect of crude oil prices gradually peters out. However, the bank lowered the inflation forecast for this year to 0.2 percent from 0.5 percent. The projection for next year was cut to 1.1 percent from 1.8 percent. The outlook for 2017 was also reduced to 2 percent from 2.2 percent.

Investors had expected a bigger cut to the deposit rate and an enhancement in the monthly asset purchases of EUR 60 billion to as much as EUR 80 billion. Some analysts had also predicted that the bank would introduce a two-tier deposit rate to support the negative deposit rate.

In a report likely to fuel speculation of a near-term interest rate hike, the Labor Department said Friday employment in the U.S. increased by more than expected in the month of November. The report said non-farm payroll employment jumped by 211,000 jobs in November compared to economist estimates for an increase of about 190,000 jobs.

The report also said the unemployment rate held at the more than seven-year low of 5.0 percent set in the previous month, matching expectations.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.37 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.59 percent.

The DAX of Germany declined 0.34 percent and the CAC 40 of France fell 0.33 percent. The FTSE of the U.K. dropped 0.59 percent and the SMI of Switzerland finished lower by 0.56 percent.

In Frankfurt, RWE dropped 4.27 percent and E.ON lost 2.21 percent.

Volkswagen increased 1.07 percent and Continental added 1.11 percent. Daimler gained 0.19 percent.

In Paris, Insurer Axa climbed 3.23 percent after announcing higher dividends for shareholders.

Technip fell 2.10 percent after the oil service provider announced a contract win. Total also decreased 2.27 percent.

Solvay, which launched a 1.5 billion euros rights issue, declined 8 percent.

In London, Whitbread fell 2.91 percent on a negative broker recommendation.

Inmarsat dropped 1.25 percent, after Citigroup downgraded the stock to "Neutral" from "Buy."

Anglo American declined 2.79 percent, after the Wall Street Journal reported that the company is planning to lower its dividend.

Berkeley, which boosted its dividend program, jumped 7.46 percent and Sage Group added 5.16 percent.

Elekta reported better-than-expected operating profit, sending its shares up by 3.61 percent in Stockholm.

German factory orders grew for the first time in four months in October, led by stronger demand for capital and consumer goods, and the Bundesbank retained its growth outlook for the economy as exports are expected to recover in the coming months.

Factory orders increased a seasonally-and-working-day adjusted 1.8 percent from September, when they fell 0.7 percent, revised from 1.7 percent estimated earlier, figures from the Destatis showed Friday. Economists had forecast a 1.2 percent growth for October.

Germany's construction activity expanded at the fastest pace in eight months in November, survey data from Markit Economics showed Friday. The seasonally adjusted Purchasing Managers' Index, or PMI, rose to 52.5 in November from 51.8 in the previous month.

With exports falling at a faster rate than imports, the Commerce Department released a report on Friday showing that the U.S. trade deficit unexpectedly widened in the month of October. The Commerce Department said the trade deficit climbed to $43.9 billion in October from a revised $42.5 billion in September.

Economists had expected the trade deficit to narrow to $40.6 billion in October from the $40.8 billion originally reported for the previous month.