European Stocks Close Lower Amid Uncertainty About Interest Rates

(RTTNews) - European stocks closed lower on Thursday on inflation concerns and uncertainty about the Federal Reserve cutting interest rate in June. The markets also digested the European Central Bank's decision to hold interest rates unchanged.

The ECB Governing Council, led by President Christine Lagarde, left the main refinancing rate, or refi, unchanged at 4.5%, as expected.

Lagarde emphasized that the ECB is not committing to a specific rate trajectory and that future decisions will be dependent on data

Policymakers consider that the key interest rates are at levels that are making a substantial contribution to the ongoing disinflation process, the ECB said. Future decisions will ensure that its policy rates will stay sufficiently restrictive for as long as necessary, the bank added.

The bank reiterated that it will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction, and that it is not pre-committing to a particular rate path.

Markets widely expect the central bank for the single currency bloc to lower interest rates in the June 6 policy session. Expectations have been strengthened by the easing trends in inflation data, though underlying price pressures remain high, and recent comments from ECB policymakers including Lagarde.

The pan European Stoxx 600 dropped 0.4%. The U.K.'s FTSE 100 ended down by 0.47%, Germany's DAX drifted down 0.79% and France's CAC 40 lost 0.27%, while Switzerland's SMI closed lower by 0.27%.

Among other markets in Europe, Austria, Finland, Greece, Iceland, Netherlands, Norway, Poland, Spain and Sweden closed weak.

Denmark, Portugal and Turkiye ended higher, while Belgium and Russia settled flat.

In the UK market, Phoenix Holdings, Aviva, Tesco, Lloyds Banking, EasyJet, Barclays, Scottish Mortgage, Natwest Group, HSBC Holdings, Reckit Benckiser, J Sainsbury, M&G, Standard Chartered and Weir Holdings lost 2 to 6.5%.

AstraZeneca gained about 2.5% after promising to increase its dividend this year. Centrica, Smiths, Kingfisher, Marks & Spencer, RightMove, Unite Group and Hikma Pharmaceuticals gained 1.5 to 3%.

SSE, Land Securities, Imperial Brands, WPP and BAE Systems also ended notably higher.

In the German market, Deutsche Telekom dropped more than 6%. Daimler Truck Holding, Commerzbank, BASF, Infineon, Siemens Energy and Deutsche Bank lost 2 to 4%.

Covestro, Siemens Healthineers, Bayer, Hannover Rueck, Symrise and Fresenius Medical Care also settled notably lower.

RWE rallied more than 2.5%. Zalando, Rheinmetall, Merck and Sartorius gained 1 to 2%.

In Paris, Publicis Groupe climbed about 3.5% after its net revenue for the first quarter grew 4.9 percent, reflecting solid performance across all regions.

Capgemini, Thales, Stellantis, Hermes International, L'Oreal and Air Liquide posted modest gains.

Edenred, Teleperformance, BNP Paribas, Credit Agricole, WorldLine, Carrefour, Sanofi and Essilor lost 1.6 to 3%.