(RTTNews.com) - The majority of the European markets ended Wednesday's session in the green, snapping a 3-day losing streak. The markets built upon the overnight rebound in the U.S. markets and the positive performance of the Asian markets. Investors are awaiting policy decisions by both the European Central Bank and the Bank of England on Thursday. They are also looking forward to the U.S. employment report for January on Friday, following the slightly weaker private sector employment data released this afternoon.
The European Central Bank is likely to leave rates unchanged tomorrow, as it faces the classic dilemma of whether to consider the low inflation and high unemployment or the improved sentiment and gradual eurozone recovery, and wait for the fresh round of macroeconomic forecasts due in March.
Adding to the ECB's woes are rising money market rates that signal a liquidity crunch and pose a threat to the fragile recovery in the currency bloc. Further, the recent turbulence in the emerging markets has put upward pressure on the euro, consequently fueling the ongoing deflationary concerns.
Many economists feel this week's decision would be a close call and some are looking forward to another round of easing, as deflation worries mount even as ECB policymakers insist there is no Japan-style scenario.
The Bank of England is likely to keep its monetary policy unchanged at the meeting on Thursday, but markets expect the bank to hint at revamped forward guidance as the unemployment rate closes in on the threshold.
Economists expect policymakers to redefine its forward guidance based on a wide range of economic indicators instead of relying only on the unemployment rate. However, Governor Mark Carney is likely to unveil details of such a plan only with the Inflation Report due on February 12.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.08 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.10 percent.
The DAX of Germany dropped by 0.13 percent, but the CAC 40 of France climbed by 0.01 percent. The FTSE 100 of the U.K. rose by 0.13 percent and the SMI of Switzerland gained 0.25 percent.
In Frankfurt, Volkswagen rallied by 0.65 percent. The Wall Street Journal reported that the German auto giant is considering raising its majority stake in Swedish heavy-duty truck maker Scania AB.
ThyssenKrupp fell by 2.51 percent, after HSBC downgraded it to "Underweight" from "Neutral."
In Paris, ArcelorMittal advanced by 1.04 percent. HSBC upgraded its rating on the stock to "Overweight" from "Neutral."
In London, RSA Insurance increased by 4.65 percent. The company has named Stephen Hester as its new CEO.
GlaxoSmithKline gained 1.64 percent, after its full year sales increased by 1 percent.
Hargreaves Lansdown plunged by 10.15 percent, after its profit for the first half of the year fell short of expectations.
Syngenta dropped by 3.41 percent in Zurich. The agribusiness firm reported a decline in fiscal 2013 profit and said it would step up its focus on costs.
Swatch Group climbed by 3.94 percent, after the watch and jewelry maker posted a 20 percent growth in 2013 net profit and raised its dividend per bearer share to 7.50 francs from 6.75 francs last year.
Enel S.p.A. rose by 0.48 percent in Milan. The utility posted a 7.6 percent increase in core earnings for 2013 and said it had cut its net debt by 3 billion euros to 39.9 billion euros at the end of December.
Alfa Laval increased by 4.63 percent in Stockholm, after its fourth quarter net sales rose by 9 percent.
Eurozone retail sales declined more than expected in December as both food and non-food product turnover decreased from last month.
Retail sales dipped 1.6 percent month-on-month, reversing the revised 0.9 percent rise in November, data released by statistical office Eurostat revealed Wednesday. Sales were expected to drop by 0.7 percent.
The Eurozone private sector expanded at the fastest pace since June 2011, but the rate of expansion was slightly slower than initially estimated, final data from Markit Economics showed Wednesday. The composite output index rose to 52.9 in January from 52.1 in December. The flash reading was 53.2.
German service sector growth was weaker than previously estimated, detailed results of a survey by Markit Economics revealed Wednesday. The headline business activity index fell to a three-month low of 53.1 in January from 53.5 in December. The flash estimate showed a higher reading of 53.6.
The French private sector contracted at a slower pace in January, and to a lesser extent than estimated earlier, revised data from a survey by Markit Economics and CDAF revealed Wednesday. The seasonally adjusted composite output index, a measure of activity in the manufacturing and service sectors, rose to a three-month high of 48.9 in January from 47.3 in December. The flash estimates were for a reading of 48.5.
The U.K. service sector growth slowed unexpectedly to a seven-month low at the start of the year as new business growth posted weaker growth. The seasonally adjusted Purchasing Managers' Index for the service sector fell to 58.3 in January from 58.8 in December, hitting the lowest level in seven months, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) revealed Wednesday.
PMI readings above 50 suggest increase in activity, while those below indicate decline. Service sector growth has weakened for three months in succession and the latest score was below the expected reading of 59.
Shop price deflation in the United Kingdom continued for a 9th straight month in January. The British Retail Consortium reported Wednesday that the deflation rate increased to 1.0 percent. from the December reading of 0.8 percent.
Employment in the U.S. private sector increased by slightly less than expected in the month of January, according to a report released by ADP and Moody's Analytics on Wednesday. The report said private sector employment increased by 175,000 jobs in January following a downwardly revised increase of 227,000 jobs in December.
Economists had expected private sector employment to rise by about 180,000 jobs compared to the addition of 238,000 jobs originally reported for the previous month.
With comments from most respondents reflecting an improvement in business conditions, the results of the Institute for Supply Management's service sector survey showed that activity in the sector grew at a slightly faster rate in January.
The ISM said its non-manufacturing index edged up to 54.0 in January from 53.0 in December, with a reading above 50 indicating growth in the service sector. Economists had been expecting the index to inch up to a reading of 53.7.
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