European Stocks Drift Lower Ahead of ECB Rates Meeting

LONDON (The Deal) -- European stock indices drifted lower on Thursday while Asian stocks ended the day mixed as European Central Bank policy makers prepared to meet to set rates.

Most economists expect action from the ECB Thursday to boost lackluster eurozone growth and combat the risk of a prolonged period of deflation. But with benchmark rates already at 0.25% policy makers will have to dig deep into their toolbox for monetary solutions to supplement what is expected to be a small cut in that key rate. The ECB will announce its rate decision at 1.45 p.m. local time, which is 7:45 a.m. EDT.

In London the FTSE 100 was down 0.28% at 6,799.49. In Frankfurt the DAX slipped 0.15% to 9,991.57 and in Paris the CAC 40 little changed at 4,501.55.

Medical devices maker Smith & Nephew was the lead gainer on the FTSE 100 on news that it has attracted a second U.S. suitor, Medtronic (MDT), of Minneapolis, after it reportedly spurned an offer from Stryker (SYK) last month. Medtronic is said to be considering making a bid and Britain's Takeover Panel may well tell the U.S. group to show its hand, after a 12% rise in Smith & Nephew's American depositary shares on Wednesday followed by the rise Thursday in London.

Logistics company Wincanton surged more than 9% after it posted an above-expected 20% increase in full-year underlying pretax profit to 25.6 million pounds ($42.9 million). The company said it's not paying a dividend so it can focus on cutting debt, which it managed to slash by 40% from a year earlier.

Home builder Bellway rose after it reported a 11% increase in the reservation rate for new homes and a strong order book. But ASOS, Britain's leading clothes-only online retailer, plunged more than 31% after warning on full-year margins following price promotions and as a strengthening of the pound hit international orders.

In Frankfurt, Henkel edged higher after agreeing to pay BC Partners 940 million euros ($1.3 billion) for French laundry products maker Spotless Group. The deal was Henkel's second this week after it agreed to buy haircare brands from buyout firm TSG Consumer Partners on Monday for 270 million euros.

In Paris, Remy Cointreau rose as it pledged to increase organic sales and operating profit in the current year after becoming one of several liquor makers and luxury goods companies to have been hit in the fiscal year just ended by a Chinese government clampdown on excessive consumption.

Remy Cointreau said its revenue declined 11% in the fiscal year ended March to 1.03 billion euros and operating profit fell 39% to 150.2 million euros.

In Hong Kong the Hang Seng declined 0.18% to 23,109.66. Oil producer CNOOC closed down 2.2%, reflecting a pan-Asian selloff of power companies.

In Tokyo the Nikkei 225 rose 0.08% to 15,079.37, led by drinks maker Asahi Group, which gained more than 5%.

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