Europe Shares Close Mixed After ECB Decision; Nokia Jumps
European shares closed narrowly mixed after the European Central Bank and the Bank of England left interest rates unchanged Thursday, while a better-than-expected trade report from China provided some support for investor sentiment.
As expected, the European Central Bank (ECB) decided to keep its interest rates unchanged at 0.75 percent after a meeting of the governing council. ECB Chief Mario Draghi said the council's decision was unanimous. The euro climbed to session highs after his comments, rising to 1.32 against the dollar.
Draghi also said while weakness in the euro zone area is expected to continue into 2013, economic activity should gradually recover later in the year.
"Several ... indicators have broadly stabilized, albeit at low levels and financial market confidence has improved significantly," he said at a press conference following the rate decision announcement.
Meanwhile, the Bank of England's Monetary Policy Committee announced that interest rates in the U.K. would remain at 0.5 percent, and that its bond-buying program would remain unchanged.
The FTSEurofirst 300 index of top European shares closed 0.3 percent lower at 1,164.03 points, after rising to as high as 1,170.29 points earlier in the session, a level not seen since March 2011.
Elsewhere in Europe, the Spanish Treasury held its first bond auction of 2013. The three bonds on offer included the first from Spain to contain a collective action clause (CAC), a legal provision designed to help reorganize government debt in times of a crisis. The Treasury sold 5.8 billion euros in bonds, well above target, and borrowing costs for its 10-year benchmark bond fell below the 5 percent level for the first time since March 2012.
In stocks news, Nokia surged after the struggling Finnish handset maker announced it had achieved underlying profitability in a trading statement and good sales of its Lumia handset.
Swatch CEO Nick Hayek said he expected Swiss watch exports as a whole to grow 5 to 7 percent in 2013, down from the 12.6 percent growth recorded for the 11 months up to November 2012.
"These are the stocks that have shown resilience during the euro zone debt crisis, and people are now keen to book profits on these and switch to recent losers that offer more upside," a Paris-based trader said.
Tesco, one of the world's biggest retailers, released a trading statement showing signs of a revival in its home market with a rise in underlying sales for the festive period. The retailer said sales at stores open over a year rose by 1.8 percent for the six weeks ending January 5, excluding fuel and VAT sales tax. Shares in the firm were higher by 2.59 percent.
Marks and Spencer released a third quarter Interim Management Statement unexpectedly on Wednesday after market close, which showed a clothing sales slump in the Christmas period; shares fell by 1.81 percent.
JD Sports, another U.K. retailer, released a trading statement highlighting that full-year pretax profit fall towards the lower end of expectations; shares were flat down by just 0.07 percent.
Recruitment company Hays released fourth-quarter trade figures highlighting its aims for growth and potential improvement in U.K. trading; shares in the firm traded 6.37 percent higher.