Europe close: Stocks waver amid disappointing earnings, euro surges against pound

European equity markets struggled for direction on Thursday, as investors weighed up some upbeat corporate results against disappointing data releases and digested the latest comments from European Central Bank president Mario Draghi.

The benchmark Stoxx Europe 600 index closed down 0.39%, while France’s CAC 40 gained 0.64% and Germany’s DAX rose 0.39%.

As of 1635 GMT, the euro was broadly flat against the dollar and gained 1% and 0.17% against the pound and the yen respectively, while Brent crude slid 0.39% to $48.39 a barrel.

During a speech in Milan, Draghi said the current quantitative easing programme has been “undoubtedly effective” so far, but also reiterated that it will be reassessed next month.

He added that even if easing does come to an end, the ECB would still have “many tools” at its disposal.

Mixed data in the Eurozone

On the economic data front, figures released by Destatis showed German factory orders unexpectedly fell in September, by 1.7% month-on-month versus expectations for 1% growth.

Meanwhile, figures from Eurostat showed Eurozone retail sales declined unexpectedly in September. Sales in the euro area fell 0.1% month-on-month compared with analysts’ expectations for a 0.2% gain and a flat reading in August.

“There are already early signs of weakness,” said Jessica Hinds, European economist at Capital Economics.

“Sales have stagnated in the past couple of months and consumer confidence has deteriorated. This suggests that the recovery in retail sales and overall household spending is already losing momentum.”

The latest Markit Eurozone retail purchasing managers’ index declined from 51.9 in September to 51.3 last month, as sales rose at their slowest pace since June but grew for the sixth consecutive month.

Elsewhere, the Bank of England kept its key interest rate on hold at 0.5%, as widely expected.

“We think the BoE is awaiting the next ECB meeting, which is held seven days before the next BoE meeting. The December meeting is crucial for our more hawkish view on the BoE,” said analysts at Danske Bank.

“We expect EUR/GBP to trade gradually lower in three to six months."

Meanwhile, across the Atlantic, the Department of Labor said new unemployment claims rose by 16,000 to a two-month high of 276,000 in the week to 31 October, compared with analysts' expectations for a 260,000 reading.

In company news, Vestas Wind Systems advanced after its third quarter operating profit came in ahead of expectations and the company lifted its profit outlook for the year, while Societe Generale rallied as it said third quarter income grew 2.4%.

Sportswear company Adidas pushed up after raising its full year sales outlook and posting better-than-expected third quarter sales growth. Adecco fell sharply, however, after the staffing group reported a surprise half-billion euro net loss in the third quarter on impairments.