Yahoo Finance Stocks fall as ECB holds interest rates and US indices sink on Big Tech earnings
How major markets are performing on Thursday
Stock markets on both sides of the Atlantic slid on Thursday with FTSE and European indices in the red at close and Nasdaq and S&P 500 sinking as Big Tech remained under pressure over disappointing earnings reports.
The tech-heavy Nasdaq (^IXIC) led the declines, down about 1.1% while S&P 500 (^GSPC) dropped about 0.7%. The Dow Jones Industrial Average (^DJI) dipped 0.4%, or more than 130 points at the open.
In London, the FTSE 100 (^FTSE) was trading 0.95% lower after noon trade, led by a slide in banking stocks after Standard Chartered (STAN.L) slumped as much as 13% after it warned of a 33% fall in profits.
Meanwhile the CAC (^FCHI) lost 0.85% in Paris, and the Frankfurt DAX (^GDAXI) was 1% down.
Market sentiment was weighed down by poor corporate results as the European Central Bank (ECB) hit the pause button on interest rate rises.
Read more: ECB hits pause on interest rate hikes
"Investors’ risk appetite has been seriously dented this week after poor earnings reports were published by some of the most important large European groups, primarily listed in the region’s leaders, France and Germany," Pierre Veyret, technical analyst at ActivTrades, said.
"Both the DAX-40 and CAC-40 index are among the worst performers so far, led lower by a batch of sectors with Consumer Cyclicals and Financial shares in the lead."
"Market volatility isn’t likely to decrease today as investors wait for another significant batch of corporate results, with 8 out of the 40 companies listed on the CAC-40 to publish their results today."
It comes as ECB policymakers are set to keep interest rates on hold for the first time in more than a year. Last month it raised the deposit rate to 4% – the highest since the euro was launched in 1999.
However since then inflation across the eurozone has fallen to 4.3% in the year to September, down from 5.2% in August.
"After the rate hike in September, the European Central Bank (ECB) said that policy rates are now at sufficiently high levels to bring inflation down to its 2% target – a strong indication that it is done with its current rate hiking cycle," Joost van Leenders, senior investment strategist at Van Lanschot Kempen, said;
"For inflation to reach the ECB’s target, rates will have to stay at these levels for a while, meaning it is unlikely we will see rates cut in the near future."
Read more: Trending tickers: Meta | Ford | Unilever | Intel
Traders will also have their eyes on US GDP data later in the day. It is forecast to have grown at an annualised rate of around 4.3% in the July to September quarter, more than twice as fast as the 2.1% recorded in April-June.
Michael Hewson at CMC Markets said: "Growth estimates for today’s Q3 numbers are higher, with estimates as high as 4.5%, given how strong retail sales have been between July and September, with personal consumption expected to come in at 4%. On prices we’re expecting to see a slowdown from 3.7% to 2.5%.
"With a strong labour market and US earnings also looking strong there is a considerable upside risk that a big number today could prompt another spike higher in yields as the market goes to price in one more rate hike between now and the end of the year."
Elsewhere, weekly jobless claims are expected to rise from 198,000 to 207,000.
Watch: How does inflation affect interest rates?
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