Europe open: Stocks little changed ahead of ECB announcement

European stocks were little changed in early trade as investors looked ahead to the European Central Bank’s latest rate announcement.

At 0900 BST, the benchmark Stoxx 600 index and France’s CAC 40 were both flat, while Germany’s DAX was 0.2% higher.

The ECB is widely expected to keep interest rates and monetary policy unchanged, but investors are hoping chief Mario Draghi will underline his support for ultra-loose monetary policy measures.

“In light of little new major news or data overnight and a busy day ahead, stocks seem to have entered into consolidation mode for now,” said Markus Huber, at trader at City of London Markets.

“Early afternoon all eyes will be on the ECB meeting, although nobody is expecting any changes in regard to rates or further economic stimulus mainly because not enough time has passed to be able to properly assess if previously implemented measures are working the meeting itself is still likely to overshadow US corporate earnings releases ahead of the US open.”

Meanwhile, oil prices slipped back into the red having gained earlier after the International Energy Agency said this year would see the biggest drop in non-OPEC production in a generation.

West Texas Intermediate was down 0.1% to $44.12 while Brent crude was also off 0.1%, to $45.75.

On the corporate front, shares in beleaguered German car maker Volkswagen rallied after Reuters cited sources as saying that VW and US officials had reached a framework deal under which the car maker would offer to buy back almost 500,000 diesel cars that used software to cheat US emission rules.

Swedish mobile telecom equipment maker Ericsson was firmly in the red after its first-quarter sales and operating profit missed analysts’ expectations.

Broadcaster Sky was under the cosh despite reporting strong growth in customer numbers in the first three quarters.

The ECB rate announcement is at 1245 BST. In the US, initial jobless claims and the Philadelphia Fed survey are at 1330 BST.