European Stocks Close Lower After Rates Decision

European Market Closes Lower
European Market Closes Lower   

European shares reversed early gains to closed lower on Thursday, after both the European Central Bank and the Bank of England left their main benchmark interest rates unchanged.

(Read More: BoE Hold Rates as King Bids Farewell)


The pan-European FTSEurofirst 300 Index extended losses, after European Central Bank President Mario Draghi cautioned against becoming overly optimistic about market conditions. The index closed 1.1 percent down at 1,180.22 points.

The ECB also cut its GDP outlook for the euro zone in 2013 to a 0.6 percent contraction, having previously predicted a 0.5 percent contraction. European banks stocks were particularly badly hit by the news, closing over 2 percent lower.

(Read More: ECB Holds Rates and Cuts Growth Forecast)

The Bank of England decided to keep its interest rate unchanged at 0.5 percent, as expected, and said it would not add to its current quantitative easing program that has so far totaled 375 billion pounds ($577.6 billion).

NYSE Euronext bourses failed to open initially due to a technical fault and Paris, Brussels, Amsterdam and Lisbon indexes opened an hour late.

(Read More: Delay in Europe Indexes Open Causes 'Angst')