By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- Markets in Spain and Italy were leading
gains across European markets on Thursday after the European
Central Bank and Bank of England both left respective policies
unchanged. U.K. retailers were in focus after more dismal Christmas
reports, while technology stocks were active after a broker note,
with ASML Holding NV among the gainers.
The Stoxx Europe 600 index flattened to 329.98.
Shares of Wm. Morrison Supermarkets topped the decliners list
with a nearly 8% tumble after the retailer reported a disappointing
performance over the Christmas period and said full-year underlying
profit would be at the bottom of the range of current market
forecasts.
TGS-NOPEC Geophysical Company ASA jumped 12% after the
Norway-based provider of multi-client geoscience data said net
revenues for 2013 will come in higher than expected, at $882
million, due to record-high late sales in the fourth quarter.
Shares of Finnish-based Waertsilae Oyj surged 9% after the maker
of engines for tankers, cruise and navy ships said it's no longer
in talks about a potential tie-up with Rolls-Royce Holdings PLC
.
The Bank of England's Monetary Policy Committee held the size of
its bond-buying program unchanged and its key lending rate at a
record low of 0.5%.
The European Central Bank also left policy changed, but the
subsequent press conference with ECB President Mario Draghi will be
scoured for clues about inflation concerns or further easing down
the road.
"With interest rates at 0.25%, the ECB's hands are a little tied
when it comes to further rate cuts, which means if they want to
provide further stimulus to slow down the rate of disinflation,
they will have to explore other options, such as additional forward
guidance, negative deposit rates, LTROs or quantitative easing,
although I think the last is very unlikely," said Craig Erlam,
market analyst at Alpari, in a note.
"It is likely to take them a little longer to agree on which of
these to opt for, which is why I don't expect a decision today," he
said.
Peripheral euro-zone markets repeated their outperformance, with
the Spain IBEX 35 index up 0.8% to 10,341.80, while the FTSE MIB
Italy index jumped 1% to 19,637. Shares of banks were in the
driver's seat as the regions hardest-hit by the crisis drew new
interest from investors, who were more convinced of the recoveries
as borrowing costs have dropped.
The FTSE 100 index was flat at 6,723.57, supported by a 1% rise
for BP PLC (BP).
Technology stocks were active after a note from Deutsche Bank.
The investment bank downgraded shares of ARM Holdings PLC (ARMHY)
to hold from buy, saying it's waiting for better entry points. It
also cut Alcatel-Lucent SA (ALU) to hold from buy, with Deutsche
Bank analysts saying a deteriorating mix will put incremental
pressure on gross margins. Shares of ARM Holdings slid 4.6%, and
Alcatel-Lucent dropped 4%.
Deutsche Bank reiterated its buy rating on ASML Holding NV
(ASMLD) , saying expectations have already moderated for the group.
Shares of ASML rose 1.8%.
Among other indexes, the German DAX 30 was flat at 9,502.02,
with Daimler AG gaining 1.2%. Shares of Fresenius Medical Care AG
& Co. gained 1.7% after it was lifted to neutral from
underweight at J.P. Morgan Cazenove. The investment bank raised
Fresenius SE to overweight from neutral, and shares rose 1.3%.
Analysts said the European medical technology and services sector
should face fewer headwinds than in 2013.
The French CAC 40 index eased 0.1% to 4,255.05.
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