Europe Markets

European markets close mixed after Fed minutes, Draghi speech; Pearson falls 6.8%


European bourses closed mixed Thursday following indications by the U.S. Federal Reserve that it wants to pare back its balance sheet and dovish comments from ECB President Mario Draghi.

The FTSE 100 closed the day down 0.39 percent; the French CAC, however, was up 0.58 percent at the close of play and the German DAX was also up 0.11 percent.

The pan-European Stoxx 600 closed up 0.18 percent higher with sectors largely ending the day in positive territory following a choppy day of deals.

Oil & Gas and Retail were among the best performing sectors on Thursday, both up 0.65 percent. The Anglo-Irish oil company Tullow Oil had dropped nearly 15 percent in early trade but soon trimmed those losses, ending the day at the top of the European benchmark. It was 7.4 percent higher at the close of play. Thursday was the first trading day for the firm's shares following a $750 million rights issue, the Financial Times reported.

Meanwhile, Media stocks led the falls during afternoon trading, with the British publisher Pearson down by 6.6 percent following a rating downgrade by BNP Paribas. It was the worst performing stock.

Banking and financial services stocks also moved marginally lower following comments from ECB (European Central Bank) President Mario Draghi that the bank's policy is adequate and as of yet it is too soon to start tightening. The euro had been trading slightly up on the day, but fell after Draghi's comments, hitting $1.07.

In the U.S., the Fed signaled a willingness to reduce the $4.5 trillion in bonds on its balance sheet at some point this year.

ECB’s Draghi: Monetary policy is still appropriate

Looking at individual stocks, Drugmaker BTG was also among the best performers Thursday on forecasts that its 2017 fiscal revenue will come in at or above expectations. Also, Electrocomponents rose 2.6 percent on expectations that its full-year profit will exceed market forecasts, before settling up 1.5 percent in afternoon deals.

In the U.K., Unilever moved marginally higher after announcing that it is combining two of its main business units and boosting shareholder returns. It ended the day up 0.98 percent.

Trump, data, oil

Investors also seem to be taking a defensive approach ahead of a meeting between U.S. President Donald Trump and President Xi Jinping of China. They are set to discuss trade and relations with North Korea this Thursday at Mar-a-Lago. Fears of a potential trade war between the two kept Asian markets on edge.

In terms of data, the latest German industrial order numbers showed a recovery in February after a sharp fall in the previous month. Contracts increased 3.4 percent on the month, slightly below expectations.

Oil prices moved slightly higher on Thursday after higher than expected US inventories. Brent was trading at $54.66 a barrel and WTI was sold at $51.41 a barrel.

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