Europe close: Stocks end slightly lower after mixed raft of data and earnings

European equity markets declined on Thursday, dragged lower by some mixed economic data, while investors digested a hawkish policy statement from the Federal Reserve

The benchmark Stoxx Europe 600 closed 0.05% lower, while Germany’s DAX fell 0.29% and France’s CAC lost 0.10%.

The Fed stood pat on interest rates on Wednesday, but the accompanying statement suggested a rate hike in December may be on the cards.

As of 1630 GMT, the euro was on the front foot against the main currencies, gaining 0.41% and 0.55% against the dollar and the yen respectively and 0.21% against the pound, while Brent crude climbed 0.22% to $49.16 a barrel.

Mixed data in the Eurozone

On the economic figures released by the Federal Labour Agency showed German unemployment declined more than expected in October, while the unemployment rate remained unchanged at 6.4% - its lowest level since reunification.

Elsewhere, data from the European Commission showed business confidence in the Eurozone came in better than expected in October.

Meanwhile, according to Destatis, Germany’s statistical office, the consumer price index rose 0.3% year-on-year last month compared with a flat reading in the previous month and with analysts’ expectations for a 0.2% gain.

Month-on-month, the CPI was also flat from the previous month, compared with analysts’ expectations for a 0.1% decline.

“We believe there is still some potential for a past euro weakness to push core goods prices higher in the near term,” said Gizem Kara, senior European economist at BNP Paribas.

“With a tight labour market, domestic price pressures could also build up much quicker in Germany compared to elsewhere in Europe.”

US economy slows down in Q3

Across the Atlantic, data released on Thursday showed gross domestic product expanded 1.5% over the three months to September, slower than the 3.9% gain registered in the previous quarter and weaker than analysts’ expectations for a 1.6% reading.

“US GDP gave yet another indicator of why markets believe a December rate hike is optimistic at best from the Fed, with the headline rate falling back to 1.5%,” said IG’s market analyst Joshua Mahony.

Personal consumption expenditures, which make up the lion's share of GDP, grew at 3.2% after expanding by 3.6% over the previous three months, falling slightly short of consensus for a 3.3% increase.

Elsewhere, according to the Department of Labor, new claims rose by 1,000 to 260,000 in the week to 24 October, compared with analysts' expectations for a 265,000 reading

In company news, Deutsche Bank tumbled 7.25% after the company announced plans to cut up to 35,000 jobs over the next two years, as it posted a €6bn loss for the third quarter and said it will scrap its 2015 and 2016 dividends.

Royal Dutch Shell slipped 0.64% after the company slumped to a third-quarter loss of $6.1bn (£4bn), with earnings well short of forecasts.

Nokia surged 9.66% after the Finnish mobile phone manufacturer reported a smaller-than-expected drop in third quarter profit.