FRANKFURT, Sept 11 ― Major European bourses closed lower yesterday after the European Central Bank kept its policy rates unchanged and said its existing stimulus measures were sufficient and likely to be used in full.
The pan-European STOXX 600 index dropped 0.6 per cent, as ECB President Christine Lagarde said the central bank is carefully watching the implications of a strong euro. With the economic recovery losing momentum there is an expectation that the bank will at some point provide more stimulus.
“The balanced tone struck by the ECB at today's meeting was less dovish than many investors may have been expecting,” said Jai Malhi, global market strategist at JP Morgan Asset Management.
“The lack of policy change at the ECB is much more to do with the reduced effectiveness of the remaining options at its disposal rather than the central bank being comfortable with the current state of the economy.”
Markets closely followed the latest back and forth between the UK and the European Union involving Britain's exit from the bloc.
The EU told Britain it should urgently scrap a plan to break their divorce treaty but Prime Minister Boris Johnson's government refused and instead pressed ahead with a draft law that could sink four years of Brexit talks.
Rate-sensitive European banks fell 0.5 per cent, while travel and leisure stocks bounced 0.7 per cent following steep declines in the previous session.
Among stocks, LVMH shares rose 0.1 per cent, as the French luxury goods group said it would counter-sue Tiffany, accusing it of mismanagement through the coronavirus crisis after the US jeweller accused the French group of trying to bow out of a US$16 billion (RM66.6 billion) acquisition deal.
Buyout firm EQT rose 2 per cent on readying a sale of German energy services firm Getec as it seeks to benefit from high valuations for energy infrastructure assets, people familiar with the matter said.
Volkswagen's trucks arm Traton dropped 1 per cent after it upped its takeover offer for US peer Navistar to US$43.00 per Navistar share, up from US$35 per share.
Games Workshop jumped 11.7 per cent to the top of the STOXX 600 after saying trading in the three months to end August topped its expectations.
Italy's Nexi gained 6.8 per cent after a report that the payments firms and SIA are close to clearing a major hurdle to a potential merger. ― Reuters
