EUROPE MARKETS: European Stocks Search For Firm Footing After ECB Decision, As U.K. Votes

ECB drops reference to potential for further rate cut

Stocks across Europe swayed Thursday, with investors assessing the European Central Bank's policy decision while they waited for results from the U.K.'s general election.

The Stoxx Europe 600 index ) was up less than 0.1% at 389.26, trimming a rise of 0.3% earlier in the session, and most major regional indexes dipped in and out of positive territory. Tech, utility and consumer-goods shares were higher, but health care, telecom and basic material shares struggled.

The benchmark on Wednesday closed down 0.1% (European%20stocks%20wobble%20into%20the%20close%20ahead%20of%20%e2%80%98Super%20Thursday%e2%80%99) at a three-week low and a third straight loss.

"Thursday promises to be a massive day for financial markets with major risk events taking place in the U.K., eurozone and U.S. that could create substantial volatility throughout the day," said Craig Erlam, senior market analyst at Oanda, in a note.

In the U.K., polls opened at 7 a.m. London time, or 2 a.m. Eastern Time. U.K. Prime Minister Theresa May in April called a snap general election ( in a bid to gain more seats for her Conservative Party, and so strengthen her hand in Brexit negotiations (

ECB: European stocks were steady after the European Central Bank, led by President Mario Draghi, left interest rates unchanged, as expected, but removed language from its policy statement indicating rates could go lower in the future (

The "ECB just gave a sneak preview of how the first baby step towards tapering could look like," said Carsten Brzeski, chief economist at ING, in a note.

"It was not about what the ECB said but what it didn't say," he added. "This easing bias is now gone."

Keep track of MarketWatch's live blog of Draghi's press conference (

See:Why ECB can take only 'baby steps' toward ending ultraloose monetary policy (

The ECB may start to taper quantitative easing as of January 2018, over six to nine months, with a decision likely due in September, UBS said in a note published early Thursday.

The euro on Thursday fell to a low of $1.1217after the ECB policy decision was released. It later recovered to $1.1229, compared with $1.1257 late Wednesday.

The euro-dollar pair "has rallied sharply, as a result of a reduction in political risk following the French elections, market expectations for a less dovish message from the ECB, and some broad dollar weakness," added UBS. "From a longer-term perspective, we remain bullish, but in the near-term, risk-reward has worsened given the sharp recent rise, and risk to long positions has become more symmetric."

U.K. election: The FTSE 100 was down 0.2% at 7,463, but has been darting between small gains and losses. Keeping some pressure on the index was the pound , which traded at a two-week high during the session.

The more U.K. domestically focused and mid-cap FTSE 250 index also seesawed during the session.

Read:U.K. election -- these are the stocks and sectors to watch once the result is in (

"The most undesirable outcome is surely a hung parliament that produces both domestic political uncertainty and, more importantly, uncertainty and delays in Brexit negotiations," which could "therefore be devastating for sterling," said Oanda's Erlam.

"While the knee-jerk reaction to this may also be bad for the FTSE, as we saw after the EU referendum, we could see this bounce back quite quickly with the weaker currency benefiting its mostly outward facing companies."

Read:This is the worst that could happen to the pound in the U.K. election -- and it's not Jeremy Corbyn (

Stock movers: Auto Trader Group PLC shares (AUTO.LN) fell 4.8% as the online car sales website operator offered a cautious comment in its report of higher yearly pretax profit and sales (

Petrofac Ltd. (PFC.LN) leapt 3.1% after the company won a 10-year contract from Petroleum Development Oman ( to provide support services for oil and gas projects.

Indexes: Germany's DAX 30 was up 0.4% at 12,721.63, while France's CAC 40 rose 0.1% to 5,271.46. Spain's IBEX 35 picked up 0.6% at 10,933.60.

Economic news: The eurozone economy grew faster than initially estimated ( in the first quarter of 2017. Gross domestic product expanded by 0.6% in the period, up from a previous reading of 0.5%.

(END) Dow Jones Newswires

June 08, 2017 08:36 ET (12:36 GMT)