European Stocks Slide after ECB Meeting

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European stock markets lost steam Thursday and slid lower following a meeting by directors of the European Central Bank (ECB).

In New York, the Dow Jones index dipped as investors mulled mixed economic data on housing and jobs.

That marked a swift change from optimism on Wednesday as Joe Biden was inaugurated as the 46th U.S. president.

In Frankfurt, ECB chief Christine Lagarde warned the coronavirus pandemic posed "serious risks" to the eurozone economy as new variants spread quickly and vaccination campaigns stumbled.

ECB policymakers left key interest rates on hold however, and took no fresh action after ramping up their pandemic support last month.

The euro fell in value against the pound, with the British currency buoyed by the UK's early vaccine rollout, analysts said.

The stronger pound, which briefly hit a 2.5-year high versus the dollar, weighed on London's benchmark FTSE 100 index, especially on multinationals that record substantial earnings in the U.S. currency. 

Europe's single currency also gained ground against the dollar, and Lagarde emphasized during a press briefing: "We are monitoring very carefully exchange rates."

A stronger euro makes imports cheaper, keeping a lid on consumer prices and inflation, while exports become less competitive, hurting growth prospects.

But at the end of the day, UniCredit research chief Marco Valli remarked that the ECB's "foreign exchange rhetoric did not change, confirming that the euro has not yet approached the GC’s (governing council's) pain threshold."

Earlier in the day, Asian stock markets posted solid gains as Biden prepared to unveil plans on tackling the coronavirus crisis.

The Bank of Japan revised its growth outlook upwards for the next two years meanwhile, and maintained its ultra-loose monetary policy while noting it was hard to establish clear forecasts owing to the pandemic.

On Wednesday, Biden signed a flurry of executive orders, starting with rejoining the 2015 Paris climate accord and keeping the United States in the World Health Organization.

On Thursday, investors welcomed official data that showed strength in the U.S. housing market.

On the other hand, new U.S. jobless claims fell marginally from the prior week, but remained at 900,000, a stunningly high level some 10 months into the coronavirus pandemic.

"The consensus view now (is) that... Biden's early focus will be more on growth than tax hikes," said Axi strategist Stephen Innes.

Meanwhile, "central banks may have a little more to do yet if we're going to see the turbo charged recovery we're hoping for," Oanda trading group analyst Craig Erlam told AFP.

- Key figures around 1700 GMT -

New York - Dow: DOWN less than 0.1 percent at 31,173.88 points

EURO STOXX 50: DOWN 0.2 percent at 3,618.35

London - FTSE 100: DOWN 0.4 percent at 6,715.42 (close)

Frankfurt - DAX 30: DOWN 0.1 percent at 13,906.67 (close)

Paris - CAC 40: DOWN 0.7 percent at 5,590.79 (close)

Tokyo - Nikkei 225: UP 0.8 percent at 28,756.86 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 29,927.76 (close)

Shanghai - Composite: UP 1.1 percent at 3,621.26 (close)

Euro/dollar: UP at $1.2142 from $1.2104 at 2150 GMT

Dollar/yen: UP at 103.58 yen from 103.53 

Pound/dollar: UP at $1.3721 from $1.3657

Euro/pound: DOWN at 88.50 pence from 88.64 pence

West Texas Intermediate: DOWN 0.6 percent at $52.98 per barrel

Brent North Sea crude: DOWN 0.3 percent at $55.91

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