Europe open: Stocks track losses on Wall Street, ECB in focus
Stocks were under pressure early in the session, tracking overnight losses on Wall Street triggered by a move back higher in longer-term US government debt yields and news of a brief Israeli military incursion into Gaza.
Nevertheless, investors' focus on Thursday would be on the European Central Bank's policy decision.
As of 0832 BST the pan-European Stoxx 600 was dropping by 1.13% to 430.24, alongside a 1.43% decline for the German Dax to 14,677.89 while Italy's FTSE Mib was down by 1.24% to 27,087.65.
"Is the ECB done hiking? The decision to hike rates back in September to a record high of 4.5% was somewhat of a surprise given some of the narrative that had been coming from ECB President Christine Lagarde in the lead-up to the decision," said Michael Hewson, chief market analyst at CMC Markets UK.
"It has also become apparent that there are clear divisions on the governing council on the future path of monetary policy with the northern part of the euro area, and specifically Germany keen to keep the pressure on, lest inflation run higher despite the recent sharp falls in the headline rate."
The yield on the benchmark 10-year German Bund was edging up by two basis points to 2.901%, having earlier touched 2.937%.
Euro/dollar was off by 0.22% at 1.0546.
The ECB announcement was due at 1315 BST and President Christine Lagarde's press conference was scheduled for 1345 BST.
The day before Lagarde told Greek broadcaster Antenna TV that "we are not done yet", even as she expressed confidence that "we are on a journey to return inflation to 2%".
Rate-setters were monitoring the war between Israel and Hamas, she added.
September forecasts from the ECB for inflation to return to the 2% target in 2025 were premised on a price for Brent oil of $82.7 a barrel in 2023 and of $77.9 in 2025.
Investors were also waiting on weekly US jobless claims figures and a preliminary estimate on third quarter US GDP growth that were to be published at 1330 BST.