Europe close: Periphery stocks outperform amid political risk
European stocks ended the day on a mixed note as investors took in the Federal Reserve's policy announcement and a raft of corporate earnings ahead of the monthly US jobs report which was set for release on the next day.
Investors were also asked to digest the Bank of England's decision to trim its inflation forecasts which sent the pound tumbling.
The benchmark Stoxx Europe 600 erased 0.34%, Germany’s DAX was down 0.27% and France’s CAC 40 drifted lower by 0.01%. In London, the FTSE 100 was up 0.47% as the Bank of England's Inflation Report sent government bond yields and Sterling lower.
Milan's FTSE Mibtel advanced 0.79% while Spain's Ibex 35 tacked on 0.81%.
Periphery stocks were relative outperformers, boosted perhaps by supportive comments from strategists at JP Morgan.
Meanwhile oil prices were also mixed, with West Texas Intermediate down 0.07% to $53.84 per barrel and Brent crude rising 0.2% to $56.90.
The new political landscape globally was not far from investors' minds either, with JP Morgan cautioning that political risk was at a 20-year high.
For his part meanwhile, Albert Edwards at SocGen penned a note telling clients that "the Donald Administration might be a neo-liberal nightmare, but stripping away some of his more controversial rhetoric on immigration, a lot of what he says on the economic front makes perfect sense to me.
"Germany is one of the biggest currency manipulators in the world. Germany aggressively refutes any criticism, let alone does anything about it (unlike China)."
As a backdrop, market participants were digesting the latest rate announcement from the Federal Reserve late on Wednesday. The bank kept its main policy settings unchanged, as it waited for greater clarity on the new administration's fiscal plans.
However, unlike at its previous meeting in mid-December, rate-setters pointed out how measures of consumer and business sentiment had improved of late.
Regarding prices, inflation was still below the Fed's 2.0% target, the Fed said, adding that "market-based measures of inflation compensation remain low."
"Near-term risks to the economic outlook appear roughly balanced," the Fed also reiterated in its statement.
Monetary policymakers in Washington DC kept the range for the Fed funds rate at between 0.50% and 0.75%, as expected.
In corporate news, Deutsche Bank was under the cosh as it posted a €1.9bn net loss for the fourth quarter, falling short of expectations as legal costs took their toll.
Novo Nordisk slumped after downgrading its 2017 sales outlook and Daimler fell on the back of a cautious 2017 profit outlook despite posting a jump in fourth-quarter net profit.
AstraZeneca was on the up even as the pharmaceuticals company cautioned that revenue and profit was set to decline this year as generic versions of its cholesterol drug Crestor dent sales.
Vodafone was also in the red after saying revenue in the third quarter declined by 3.9% and that earnings would be at the lower end of its previous guidance.
Consumer goods company Reckitt Benckiser rallied after confirming that it is in “advanced negotiations” to buy US baby food maker Mead Johnson for around $16.7bn, a move which could bolster its health products business.
Nokia was also on the front foot as the Finnish telecommunications group’s fourth-quarter net profit came in ahead of expectations, while oil giant Shell gained ground despite reporting a 44% drop in fourth-quarter profit as it maintained its dividend.
French water utility company Veolia was in the green as its chief executive Antoine Frerot announced plans to cut costs by €600m over the next three years in order to combat challenging market conditions and political uncertainty.