Europe close: Stock gains stall as ECB hikes, promises more

The rally in European markets stalled on Thursday after the US Federal Reserve paused rate rises, but said more could be on the way.

That was followed by data that appeared to show that China's economic recovery was sputtering and another 25 basis point rate hike by the European Central Bank.

The pan-European Stoxx 600 index was down 0.12% to 464.38 and the German Dax drifted lower by 0.13% to 16,298.55.

Spain's Ibex 35 was off by just 0.02% to 9,430.80.

Worth highlighting, in her post meeting presser, ECB chief Christine Lagarde all but pre-announced an additional rate hike for July's meeting.

Fed chairman Jerome Powell had also suprised some market participants in his own way, suggesting two more rises could be on the way before 2023 was out.

Data released overnight meanwhile showed China's economic recovery was stalling.

And the People’s Bank of China cut a key benchmark, its medium-term loan rate, by 10 basis points and the yuan hit a six-month low of 7.1783 per dollar.

Data on industrial output and retail sales fell short of market forecasts.

In equity news, shares in Swedish clothing giant H&M gained 4% as the company said June sales had started well despite weaker-than-expected second quarter sales.