Investing.com - European stocks were lower on Thursday, as fresh concerns over tensions between the U.S. and Russia weighed on sentiment, although speculation over additional stimulus by the European Central Bank still lent some support to European equities.
During European morning trade, the DJ Euro Stoxx 50 fell 0.27%, France’s CAC 40 retreated 0.43%, while Germany’s DAX slid 0.36%.
Markets were jittery as U.S. President Barack Obama said late Wednesday that Russia's actions had to be condemned and he warned that "the isolation will deepen, sanctions will increase" for Russia.
But European equities remained supported after ECB governing council member and Bundesbank head Jens Weidmann said Tuesday that a negative deposit rate could be an appropriate way to address the impact of strong gains in the euro.
He also said it was not out of the question for the ECB to buy loans or other assets from banks to fight deflation, indicating a softening of the Bundesbank’s stance on quantitative easing.
The same day, ECB President Mario Draghi that the central bank stood ready to act if inflation slipped lower than the ECB expected.
Financial stocks were broadly lower, as French lenders BNP Paribas (BNPP.PAR) and Societe Generale (SOGN.PAR) declined 1.17% and 0.43%, while Germany's Deutsche Bank (DBKGn.XETRA) fell 0.14%.
Among peripheral lenders, Italy's Unicredit (CRDI.MILAN) and Intesa Sanpaolo (ISP.MILAN) lost 0.48% and 0.01% respectively, while Spanish banks Santander (SAN.MADRID) and BBVA (BBVA.MADRID) dropped 0.86% and 0.98%. Banco Santander was hit after its U.S. unit failed the Federal Reserve’s stress test.
Elsewhere, Hennes & Mauritz AB (HMb.ST) plummeted 3.76% after the retailer reported quarterly profit below analysts’ estimates.
On the upside, United Internet (UTDI.XETRA) surged 4.35% after the German company announced that profit climbed 25% last year.
In London, FTSE 100 retreated 0.54%, led by Babcock International Group (BAB.LSE), down 4.61%, after the engineering-services company agreed to buy private equity-owned Avincis for £920 million to expand in helicopter servicing.
Babcock is reportedly set to absorb £705 million of Avincis' debt and carry out a rights offering to help fund the acquisition.
Mining stocks were also broadly lower, as Rio Tinto (RIO.LSE) dropped 0.97% and Glencore Xstrata (GLEN.LSE) tumbled 1.48%, while Vedanta Resources (VED.LSE) and Fresnillo (FRES.LSE) lost 1.42% and 2.09% respectively.
In the financial sector, Lloyds Banking Group (LLOY.LSE) edged down 0.04% and HSBC Holdings (HSBA.LSE) declined 0.68%, while Barclays (BARC.LSE) and the Royal Bank of Scotland (RBS.LSE) plummeted 1.29% and 1.67%. RBS's U.S. unit failed the Federal Reserve's stress test.
In the U.S., equity markets pointed to a moderately higher open. The Dow 30 futures pointed to a 0.08% gain, S&P 500 futures signaled a 0.09% rise, while the Nasdaq 100 futures indicated a 0.09% increase.
Later in the day, the U.S. was to publish final data on fourth quarter economic growth, as well as the weekly report on initial jobless claims and private sector data on pending home sales.