European Markets Finished Mixed After ECB Minutes

(RTTNews) - The European markets ended Thursday's session with mixed results. While most markets in Europe were modestly higher in early trade, a pullback late in the afternoon drew many of them into negative territory. Weakness on Wall Street contributed to the late session sell-off.

Mining and resource stocks were under pressure Thursday, as investors took some profits following yesterday's gains. Bank stocks also turned in a weak performance Thursday and energy stocks slipped despite the continued rise in crude oil prices. Oil prices began to pare early gains after the U.S. EIA reported that U.S. crude inventories increased by 2.1 million barrels last week. Expectations had been for an increase of 3.9 million barrels.

While euro area economic recovery was progressing, downside risks increased again since the start of the year, mainly due to global concerns, the minutes of the European Central Bank's January rate-setting session showed Thursday.

"Downside risks had increased again since the beginning of the current year, amid heightened uncertainty about the growth prospects of emerging market economies, volatility in financial markets and geopolitical risks," the report, which the ECB calls "the account", said.

The ECB minutes said that inflation had Eurozone continued to be weaker-than-expected, mainly due to the renewed sharp fall in oil prices and the persistently subdued underlying price pressures.

"Weaker than anticipated growth in wages, in conjunction with declining inflation expectations, could also signal increased risks of second-round effects," the report said.

Financial market conditions in the euro area had clearly deteriorated since the early December Governing Council meeting, although the magnitude and persistence of these developments were still uncertain, the report added.

The minutes also said that there was unanimity in the Governing Council in seeking a review of the policy stance in March after a thorough analysis of data and also after receiving the latest ECB Staff macroeconomic projections.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.09 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.52 percent.

The DAX of Germany climbed 0.92 percent and the CAC 40 of France rose 0.15 percent. The FTSE of the U.K. declined 0.97 percent and the SMI of Switzerland finished lower by 0.37 percent.

In Frankfurt, Deutsche Boerse climbed 2.74 percent. The stock exchange operator boosted dividend despite reporting a drop in fourth-quarter profit.

RWE increased 2.27 percent and peer E.ON gained 2.09 percent.

Deutsche Bank dropped 4.14 percent and Commerzbank fell 1.11 percent.

In Paris, hotel group Accor advanced 2.73 percent after reporting an 11 percent increase in 2015 profit.

Air France-KLM surged 10.66 percent. The Franco-Dutch airline posted its first annual operating profit since 2010, helped by lower fuel costs and growth in passenger traffic.

Information technology services company Cap Gemini rose 4.43 percent after reporting a 20 percent increase in annual operating profit.

Credit Agricole declined 2.41 percent and BNP Paribas lost 1.93 percent. Societe Generale also weakened by 1.72 percent.

In London, Tullow Oil dropped 11.29 percent after the oil group said it had experienced problems with a storage vessel at its flagship Jubilee field in Ghana.

Mining stocks were under pressure as investors took profits following yesterday's gains. Anglo American fell 7.70 percent and Rio Tinto surrendered 3.20 percent. Antofagasta declined 0.23 percent and BHP Billiton weakened by 0.61 percent. Shares of Glencore also dropped 1.75 percent.

Barclays declined 3.81 percent and Standard Chartered lost 5.48 percent. Royal Bank of Scotland decreased 2.10 percent and HSBC fell 1.77 percent.

Nestle decreased 3.71 percent in Zurich. The food giant forecast softer pricing and growth in 2016 after reporting the smallest annual sales gain in six years.

Financial group KBC fell 8.02 percent in Brussels, after it reported fourth-quarter profit below analysts' expectations.

Oil & gas company OMV slipped 2.56 percent in Vienna after slashing its 2015 dividend.

The euro area current account surplus declined in December as the surplus on trade in goods and services dropped from prior month, the European Central Bank said Thursday. The current account surplus fell to EUR 25.5 billion from EUR 26.9 billion in November.

French consumer price inflation held steady at the beginning of the year as initially estimated, final figures from the statistical office Insee showed Thursday. The consumer price index rose 0.2 percent year-over-year in January, the same rate of increase as in the previous month. The figure was also matched with preliminary report.

China's inflation accelerated to a five-month high in January but producer prices declined at a slower pace. Consumer prices advanced 1.8 percent year-on-year in January, faster than December's 1.6 percent increase, the National Bureau of Statistics said Thursday. This was the highest rate since August 2015, when inflation was 2 percent.

Nonetheless, it was slightly slower than the 1.9 percent rise forecast by economists.

First-time claims for U.S. unemployment benefits unexpectedly decreased in the week ended February 13th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims fell to 262,000, a decrease of 7,000 from the previous week's unrevised level of 269,000. The drop surprised economists, who had expected jobless claims to rise to 275,000.

While the Federal Reserve Bank of Philadelphia released a report on Thursday showing a modest increase by its index of regional manufacturing activity in the month of February, the index remained negative for the sixth consecutive month.

The Philly Fed said the diffusion index for current activity rose to a negative 2.8 in February from a negative 3.5 in January, but a negative reading indicates continued weakness in business conditions. Economists had expected the index to inch up to a negative 3.0.

Driven primarily by steep drops in stock prices and weakness in initial jobless claims, the Conference Board released a report on Thursday showing a modest decrease by its index of leading U.S. economic indicators in the month of January.

The Conference Board said its leading economic index edged down by 0.2 percent in January following a revised 0.3 percent decrease in December. The modest drop by the index matched economist estimates.