European shares took a pause from their recent rally Thursday as investors awaited the European Central Bank's monthly policy announcement.
The Stoxx Europe 600 index was 0.1% lower midmorning. The benchmark inched higher on Wednesday, cementing a seventh successive day of rises. Shares have been boosted by growing expectations that the ECB could introduce new easing measures--including negative interest rates or quantitative easing--to stave off the threat of sluggish inflation, which sank to a low of more than four years in March.
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Even so, a majority of analysts expect the central bank to keep policy on hold at Thursday's meeting.
"It remains our view that the ECB will conduct no easing at this meeting. Taking easing action other than the bazooka option--QE--could put further downward pressure on inflation expectations as the ECB admits it has a problem but doesn't use adequate tools to deal with it," said interest-rate strategists at Rabobank.
The euro was steady early Thursday. Comments from a number of ECB officials that further easing remains a possibility have had little impact on the common currency, with investors preferring to wait for concrete action.
Spanish shares bucked the trend in wider European markets, climbing 0.9% after data showing the country's service sector expanded for a fifth straight month, and at a faster pace than expected. Services data for the euro zone as a whole came in roughly as expected.
Elsewhere, riskier assets have continued to gain amid growing evidence that the U.S. economy is improving. Strong labor market and factory data on Wednesday helped the S&P 500 to reach a fresh all-time high. U.S. stock futures edged higher on Thursday, indicating a 0.1% opening gain for both the S&P and the Dow Jones Industrial Average. Changes in futures don't necessarily predict market moves after the opening bell.
In Asia, Hong Kong shares rose after China's announcement of targeted spending measures to boost growth, while Tokyo's Nikkei index was boosted by a weaker yen.
In commodities markets, gold was 0.3% lower at $1,286.60 an ounce, while Brent crude oil fell 0.2% to $104.58 a barrel.
In corporate news, Tullow Oil was the top riser on the Stoxx Europe 600 after UBS raised its rating on the London-listed oil producer to buy from neutral.
Finnish tire maker Nokian Renkaat was the worst performer after it cut its full-year guidance due to weaker economic forecasts in Russia.