European Equity Benchmarks Close Lower; ECB Leaves Interest Rates Unchanged

The broad-based major European indices closed lower in Thursday's trading session, as real estate investment trusts, and industrials weighed down the markets.

In economic news, the European Central Bank (ECB) left its benchmark main refinancing rate unchanged at 0.00%. The bank's governing council said it continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time.

The governing council said it will continue to make purchases under the asset purchase program at the current monthly pace of EUR80 billion ($85.4 billion) until the end of March.

House prices, as measured by the House Price Index, rose by 3.4% in the euro area and by 4.3% in the EU in Q3 of 2016 compared with the same quarter of the previous year, according to Eurostat, the statistical office of the European Union. Compared with Q2 of 2016, house prices rose by 1.3% in the euro area and by 1.5% in the EU in Q3 of 2016.

Eurostat also reported that the EU28 seasonally adjusted current account of the balance of payments recorded a surplus of EUR15.8 billion ($16.9 billion) in November 2016, compared with surpluses of EUR15.0 billion in October 2016 and EUR10.1 billion in November 2015.

The 12-month cumulated current account for the period ending in November 2016 recorded a surplus of EUR193.0 billion, compared with EUR145.8 billion for the 12 months to November 2015.

In France, house prices rose 2.5% in Q3 2016, compared to the previous quarter, according to the National Institute for Statistics and Economic Studies (INSEE). The prices of second-hand dwellings increased 2.7%, while new dwellings rose 1.4%. Compared to the year-ago period, house prices accelerated in 1.8% in Q3 2016. New dwelling prices grew 2.2%, while second-hand dwelling prices increased 1.7%.

In equities, real estate investment trusts weighed down the FTSE in London as British Land Company, Hammerson, and Land Securities Group, rose 3.6%, 2.9%, and 2.7% respectively, while Intu Properties and home builder Barratt Developments fell 2.4% and 2.1% each. Postal services provider Royal Mail led all decliners, closing 6% lower after it reported that letter volumes were down.

In Frankfurt, bank Commerzbank led all gainers on the DAX, rising 4.3%. But it wasn't enough to keep the DAX in positive territory as real estate developer Vonovia, and industrial group ThyssenKrupp fell 1.8% and 1.6% each. Consumer and industrial business Henkel AG, health care company Fresenius, and semiconductor company Infineon Technologies lost 0.9%, 0.7%, and 0.6%.

And on the Paris bourse, aerospace and defense company Safran led the CAC lower, falling 5.4%, followed by ophthalmic optics company Essilor International, and real estate investment trust Klepierre, which were off 3.2% and 2.5% respectively. Steel and mining company ArcelorMittal dropped 1.8%, while commercial property developer Unibail Rodamco, and oil company Total declined 1.5% and 1.3%.

The FTSE fell 0.54%, the DAX declined 0.02%, and the CAC-40 lost 0.25%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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