BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks turned easy past mid afternoon on Thursday and ended the session on a weak note after having staged a recovery of sorts following an early setback.
Comments from European Central Bank (ECB) President Christine Lagarde that the euro zone faced an 'unprecedented contraction' weighed on sentiment.
The ECB kept rates steady and nearly doubled the asset-buying program to fight the economic impact of the coronavirus pandemic, by adding 600 billion euros, to the 750 billion euros it announced in March.
The ECB also said that its asset-buying program would continue till the end of June 2021.
The pan European Stoxx 600 declined 0.72%. Among the major indices in Europe, the U.K.'s FTSE 100 ended down 0.64%, Germany's DAX slid 0.45% and France's CAC shed 0.21%, while Switzerland's SMI drifted down 1.06%.
Among other markets across Europe, Denmark, Netherlands, Portugal, Russia, Spain and Sweden ended weak.
Austria, Belgium, Czech Republic, Ireland, Norway, Poland and Turkey closed higher, while Finland ended flat.
In the U.K. market, Whitbread and Hargreaves Lansdown lost about 4.9% and 4.2%, respectively. Schroders, Informa, Melrose, Imperial Brands and National Grid were among the other prominent losers.
EasyJet rallied more than 5%. Meggitt and IAG ended higher by 3.6% and 3%, respectively.
In Germany, Continental and Bayer ended lower by 4.4% and 4%, respectively. Daimler and Merck shed 2.4% and 1.2%, respectively.
On the other hand, Covestro, Vonovia, HeidelbergCement, Thyssenkrupp, Deutsche Bank and Adidas gained 2 to 4.3%.
In the French market, Unibail Rodamco, Michelin, Valeo, Sodexo and Peugeot declined sharply, while Airbus, Publicis Groupe, Vivendi, Societe Generale, ArcelorMittal and Atos gained 1.3 to 5.2%.
The European Central Bank slashed its growth and inflation projections for this year and expects the single-currency economy to contract sharply as the coronavirus, or Covid-19, hurt economic activity severely.
For this year, the ECB staff projected an 8.7% contraction versus the 0.8% growth seen in the previous round in March. However, the growth outlook for 2021 was increased to 5.2% from 1.3%, and the forecast for 2022 was raised to 3.3% from 1.4%.
The inflation projections for all three years were lowered amid weaker energy price and an expected significant increase in economic slack. 'Overall, the Governing Council sees the balance of risks around the baseline projection to the downside,' Lagarde said.
In other economic news, Eurozone retail sales decreased 11.7% month-on-month in April, following an 11.1% drop in March, data from Eurostat showed. Economists had forecast a monthly decrease of 15%.
Germany's construction sector contracted in May as the coronavirus outbreak weighed on new orders and activity, survey results from IHS Markit showed Thursday. The construction Purchasing Managers' Index rose to 40.1 in May from 31.9 in April.
The UK construction sector downturn eased in May. The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index rose to 28.9 in May from 8.2 in April.
Switzerland's consumer price index decreased 1.3% year-on-year in May, following a 1.1% fall in April, data from the Federal Statistical Office showed on Thursday. The latest decline was the worst since January 2016, when prices fell 1.3%.
On a monthly basis, consumer prices remained unchanged in May, after a 0.4% fall in the previous month. Economists had expected a 0.1% rise.
Copyright RTT News/dpa-AFX
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