Europe close: Markets edge lower amid ECB disappointment

European stocks ended the week on a beat note as they failed to shrug off the disappointment generated by the European Central Bank’s latest policy measures.

The benchmark Stoxx Europe 600 index closed down 0.30%, while France’s CAC 40 lost 0.32% and Germany’s DAX fell 0.35%.

As of 163 GMT, the euro was 0.25% lower against the dollar but gained 0.12% against the yen and was broadly flat against the pound, while Brent crude slid 0.81% to $43.49 after OPEC ended its two-day meeting in Vienna and agreed to keep a production ceiling that reflects "current actual production".

"Mario Draghi’s failure to live up to inflated expectations has left continental markets firmly on the back foot, with a rising euro doing its best to make life difficult for stock markets," said IG’s senior market analyst Chris Beauchamp.

"As December progresses, we may see them move from anger to acceptance, but for now the continent is not the place for equity market bulls."

On the macroeconomic front, data released earlier in the session by Destatis showed Germany’s factory orders gained 1.8% month-on-month in October, snapping a three-month losing streak and exceeding expectations for orders to grow 1.2% in the period after an upwardly revised 0.7% fall in September.

Meanwhile, the headline index of Markit’s Germany construction purchasing managers’ index rose from 51.8 to an eight-month high of 52.2 in November, marking the tenth consecutive month of expansion in building activity.

News, however, was not as positive in the retail sector, as sales fell for the first time in over 12 months in November.

Markit’s seasonally adjusted retail purchasing managers’ index fell from 52.4 in October to 49.6 last month, the first time in 14 months the index has fallen under the 50 threshold that indicates no change.

Fed December rate hike firmly on the cards

Across the Atlantic, a strong non-farm payrolls report for November has all but guaranteed the US Federal Reserve will hike interest rates later this month.

According to data released by the Labor Department, the US economy added 211,000 last month compared with October’s upwardly revised 298,000 gain and with analysts’ expectations for a 200,000 reading.

“This month’s non-farm employment change may not have been quite as spectacular as last month’s figure but it seems nevertheless enough to secure the announcement of a rate hike at December’s FOMC meeting,” said Spreadex’s financial analyst Connor Campbell.

In company news, AXA rallied after the insurer set a range for its solvency ratio under the European industry's new capital rules, which it said would enable it to pay out higher dividends and invest in the business.

Sandvik slid after JP Morgan downgraded the stock to ‘underweight’ from ‘neutral’ and cut its target price.

Volkswagen after a report showed its UK sales fell 20% year-on-year in November.