European Markets Mixed After ECB Holds Rates, Signals Further Stimulus

The ECB chief indicates further stimulus could be in the works once the full impact of Brexit is known.
By Lisa Botter ,

European stocks pared earlier losses after dropping following the European Central Bank's decision to hold key interest rates steady in its first meeting since the U.K. voted to leave the European Union. 

ECB President Mario Draghi signaled that further stimulus could be put in place later this year.

At a press conference he reiterated, "Given prevailing uncertainties, the Governing Council will continue to monitor economic and financial market developments very closely and to safeguard the pass-through of its accommodative monetary policy to the real economy."

The ECB's decision follows that of the Bank of England last week, which took a wait-and-see approach to further monetary policy. The BOE said that further easing could come in the coming months.

In London, the FTSE 100 closed 0.43% down at 6,699.89.

In Frankfurt, the Dax climbed 0.27% to 10,169.45 and the Cac 40 was 0.08% down at 4,376.25.

The euro has fallen since the ECB's comments and was recently 0.16% down against the dollar at $1.0997.

Airlines pulled down the region's benchmark indices.

German carrier Lufthansa (DLAKY) fell more than 5% today after the German airline issued a profit warning. The company said that recent terrorist attacks have had an impact on travel plans, which would lead to a decline in full-year earnings.

In a statement Lufthansa said advanced bookings have declined significantly due to terrorist attacks, and greater political and economic uncertainty in Europe. It expects unit revenue for the half year from July to December to fall between 8% and 9%.

In London, low-cost airline EasyJet (ESYJY)  lost more than 5% on Thursday on news of a difficult third quarter. Total revenue for the quarter decreased by 2.6% to £1.2 billion ($1.6 billion).

The airline said performance was impacted by the attacks on the Brussels airport and the Egyptair crash. Performance was also hit by air traffic control strikes, runway closures at London's Gatwick airport and severe weather.

The owner of British Airways, International Consolidated Airlines (ICAGY) , shed 3.5%.Air France-KLM (AFLYY) was down 4.1%.

U.K. retail sales fell faster than expected in June. Bad weather throughout the month was blamed for the fall in clothing and footwear sales.

Retail sales, excluding petrol, fell 0.9% compared to May when they rose by 0.9%, figures from the Office for National Statistics show. Economists expected a 0.6% drop in June.

Fashion retailers Next and Marks & Spencer (MAKSY) fell 2.8% and 2.1%, respectively, in morning trading in London. Food retailers were also down, with supermarket chainTescoTSCDYlost 1.5% and Morrison was down 1.7%.

n Frankfurt, Daimler (DDAIY) was recently up 1.3% after announcing earnings rose 5.6% to €3.97 billion ($4.4 billion).

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