Europe close: Stocks take breather as ECB bond purchases kick-in

The main European equity indices took a breather following two days of advances, with traders keeping a close eye on whether America´s S&P 500 managed to set fresh record highs and the start of the European Central Bank´s corporate bond programme.

The DJ Stoxx 600 closed lower by 0.49% or 1.70 points to 344.56, the Dax by 0.69% or 70.65 points at 10,217.03 and the FTSE Mibtel by 0.37% or 65.79 points to 17,909.70.

On the basis of the first available reports, it appeared to be having the desired effect, boosting corporate bond prices. Nevertheless, some pundits expressed reservations about if the programme would be ultimately be successful, pointing to the relative shallowness of the euro area´s debt markets.

Sharply reduced global growth forecasts from the World Bank may have acted to offset any positive impact from the start of the ECB´s purchases and another move higher in crude oil futures.

Sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows meant the global economy would grow 2.4% in 2016 and not 2.9%, as the Washington-based lender had predicted in January.

"In an environment of anemic growth, the global economy faces mounting risks, including a further slowdown in major emerging markets," the World Bank cautioned in its latest Global Economic Prospects report.

To take note of as well, Chinese foreign trade data for May appeared to point to stable conditions in the domestic economy.

Indeed, analysts at Capital Economics believed there were early signs of a pick-up in shipments to emerging markets - although not all observers were quite as sanguine.

China's global trade surplus widened to $49.98bn in May from April's $45.6bn, missing estimates of $55.70bn. Exports fell 4.1% year-on-year, compared to analysts’ forecast for a 4% drop and the previous month’s 1.8% slide. Imports dipped 0.4% in May but it was an improvement on April’s 10.9% plunge and better than expectations for a 6.8% decrease.

Front month West Texas Intermediate crude oil futures were rising by 1.44% to $52.18 per barrel on the NYMEX, after data out overnight from the American Petroleum Institute revealing a larger-than-anticipated 3.6m barrel drawdown in stocks.

In parallel, euro/dollar was edging up by 0.40% to 1.1400.

Shares in Ingenico Group skidded 7% lower after US rival VeriFone Systems lowered its full-year earnings and revenue forecasts overnight.

Stock in Erste Group Bank AG retreated 3.8% on news of a stake sale by one of its shareholders.