EUROPE MARKETS: European Stocks Pull Back After Signs China's Economy Is Faltering
Bank of England decision is due at noon U.K. time
European stocks nudged lower on Thursday after disappointing readings on industrial activity in China raised questions about the strength of the world's second largest economy.
Traders were also cautious of taking on too much risk ahead of the Bank of England decision and after the latest threats from North Korea.
The Stoxx Europe 600 index dropped 0.2% to 380.63. On Wednesday, the pan-European benchmark closed marginally lower (http://www.marketwatch.com/story/european-stocks-pulled-lower-by-slide-in-apple-suppliers-2017-09-13), breaking a five-session winning run.
Miners lose ground: Mining stocks posted some of the biggest losses after China posted a surprise slowdown in business activity in August (http://www.marketwatch.com/story/chinas-industrial-output-grows-less-than-expected-2017-09-14). Value-added industrial output, a rough proxy for economic growth, slowed for a second straight month, rising 6.0% in August, compared with a 6.4% increase in July. Additionally growth in investments was the slowest in almost 18 years.
"In summary, after a better [first half] performance than many had expected, data for the first two months of [the second half of the year] suggests that China's momentum has begun to ebb somewhat," economists at Daiwa Capital Market said in a note.
Shares of Glencore PLC (GLEN.LN) fell 2.3%, Rio Tinto PLC (RIO) (RIO) (RIO) lost 1.9%, and steelmaker ArcelorMittal (MT) gave up 1.6%.
North Korea threats: Worries over the next move from Kim Jong Un returned to the fore on Thursday after Pyongyang threatened to sink Japan and "reduce the U.S. mainland into ashes and darkness."
The isolated nation on Sept. 3 tested its largest-ever hydrogen bomb, raising concerns about a military standoff between North Korea and the U.S. The test followed a string of missile launches over the summer, one of them which was fired right across Japanese territory.
Bank of England: At noon London time, or 7 a.m. Eastern Time, attention turns to the U.K. central bank when it releases its monetary policy update. The BOE is widely expected to keep its benchmark interest rate at a record low of 0.25%, although pressure on the bank to raise rates is building after U.K. inflation jumped to 2.9% (http://www.marketwatch.com/story/uk-inflation-picks-up-pace-testing-boe-patience-2017-09-12) in August.
However, U.K. wage growth is still lagging, and that weakness is seen as keeping the policy makers from hiking rates just yet.
"Higher borrowing costs are inevitable, and this week's inflation data was certainly a surprise to currency markets, but interest rates will not increase this month," said Lee Wild, head of equity strategy at Interactive Investor, in a note.
"At best there will likely be no more than three votes for a hike at today's Monetary Policy Committee meeting. Anything more would be a complete shock and put a rocket under sterling," he added.
The pound bought $1.3214 ahead of the decision, up slightly from $1.3210 late Wednesday in New York.
The U.K.'s FTSE 100 index slipped 0.1% to 7,376.90 (http://www.marketwatch.com/story/uk-stocks-fall-for-3rd-day-as-traders-wait-for-boe-rate-call-2017-09-14).
In other central bank news on Thursday, the Swiss National Bank kept interest rates on hold. However, the SNB said it's ready to intervene in the currency market (http://www.marketwatch.com/story/snb-holds-rates-still-ready-to-intervene-on-franc-2017-09-14) if necessary to support the Swiss franc, which it sees as overvalued.
Read:Why the Swiss central bank may be betting on a stronger euro (http://www.marketwatch.com/story/why-the-swiss-central-bank-is-betting-on-a-stronger-euro-analysts-say-2017-09-11)
Other indexes: Germany's DAX 30 index dropped 0.3% to 12,520.81, while France's CAC 40 index gave up 0.1% to 5,210.78.
The euro traded at $1.1898, up from $1.1885 on Wednesday.
Stock movers: Shares of Munich Re AG (MUV2.XE) rose 0.3%. The gain erased an earlier loss that came after the company -- the world's largest reinsurer -- said it could miss its 2017 profit target and potentially post a loss (http://www.marketwatch.com/story/munich-re-warns-of-loss-due-to-harvey-irma-2017-09-14) because of the impact from Hurricanes Harvey (http://www.marketwatch.com/story/5-ways-to-make-sure-your-hurricane-harvey-donation-does-the-most-good-2017-09-01) and Irma (http://www.marketwatch.com/story/worst-case-scenario-as-hurricane-irma-makes-landfall-in-florida-2017-09-10).
Check out:Harvey, Irma could ding U.S. economy for combined $290 billion (http://www.marketwatch.com/story/harvey-irma-could-ding-us-economy-for-combined-290-billion-2017-09-10)
Wm. Morrison Supermarkets PLC (MRW.LN) lost 4.3% even after the U.K. grocer reported a 40% rise in pretax profit (http://www.marketwatch.com/story/morrisons-profit-up-40-hits-debt-target-early-2017-09-14) in the first half of fiscal 2018.
Fiat Chrysler Automobiles NV (FCA.MI) (FCA.MI) gained 1.6% after the car maker posted a 9.8% rise in sales in Europe in August.
Outside the Stoxx 600, shares of Spire Healthcare Group PLC (SPI.LN) tumbled 15% after reporting a 75% slump in first-half profit.
(END) Dow Jones Newswires
September 14, 2017 05:28 ET (09:28 GMT)