European shares ended slightly lower on Thursday, held back by a post-results slump for British insurer Aviva, and some said they expected the pullback to continue in the short term.
The pan-European FTSEurofirst 300 Index, which hit a 4-1/2 year intraday high of 1,193.35 points on Wednesday, provisionally closed down 0.1 percent at 1,185.26 points.
The main focus was on the European Central Bank which left its benchmark interest rate unchanged as was widely expected, and offered no hints about monetary policy easing in the months ahead.
While the index saw no clear reaction to the decision, it pared back gains during the press conference when ECB President Mario Draghi was non-committal when asked whether he felt equity markets were fairly priced at current levels.
"It certainly wouldn't be surprising to us if we were to see a pull-back in equities, at least in the short-term," Henk Potts, market strategist at Barclays, said.
"But in saying that fundamentals remain very supportive indeed, therefore we'd encourage investors to continue to use any weakness to increase their exposure to an asset class that's likely to outperform, at least in the medium to long term."
The Bank of England also announced no change to its interest rates and maintained the size of its asset purchase program.
Aviva's shares slid 12.9 percent, one of the biggest drags on the FTSEurofirst 300 index, after it slashed its 2012 dividend by more than a quarter to repay debt. Shore Capital cut its outlook on the stock to sell, while Investec announced it was placing its current outlook on Aviva on review.
Earlier on Thursday, shares were boosted by a successful bond auction in Spain. Spain sold between 3.5 and 4.5 billion euros worth of bonds at the top end of its target.
"Sentiment-wise, post-election instability in Italy has pretty much been a non-event as far as Spain's government bond market is concerned. The potent signalling effect of the ECB's bond-buying program continues to outweigh concerns about country-specific risk across the euro zone periphery," Nick Spiro, managing director at Spiro Sovereign Strategy, said in a research note.
"A year ago, Spain would have never been able to sell 10-year paper at a sub-5 percent yield just days after an inconclusive Italian election. Today's Spanish bond sale says much about the sea-change in market sentiment towards the euro zone. "