European stocks dip, markets await Bank of England

Europe's main stock markets fell on Thursday and the euro eased against the dollar as traders' focus switched to Britain ahead of the Bank of England's latest monetary policy announcements. London's benchmark FTSE 100 index of top companies dipped 0.03 percent to 6,581.37 points, Frankfurt's DAX 30 lost 0.09 percent to 8,241.98 points and in Paris the CAC 40 slid by 0.99 percent in value to 3,918.31. Dealers said Paris fell heavily on technical reasons caused by the payment of dividends to shareholders by a number of companies. "Following the establishment of a five-and-a-half year high yesterday mainly on the back of an emboldened mining sector, the FTSE 100 is taking a breather today with investors' gaze turning to the Bank of England rate decision," said Brenda Kelly, senior market strategist at traders IG. The Bank of England is widely expected to keep its main lending rate at its record-low level of 0.50 percent, holding back from cutting borrowing costs to help spur growth. "Globally, we have witnessed countless surprises in the monetary policy arena with the Reserve Bank of Australia, the National Bank of Poland and even South Korea's central bankers all serving up rate cuts in the past number of days," said Kelly. "Despite the fairly mixed bag of recent data reports, general consensus is that the Bank of England will not follow suit. Economic data in the UK improved marginally with the pick-up in manufacturing, services and construction all conspiring to narrowly avoid the triple-dip recession last month," she added. Although Britain is not a member of the eurozone, the single-currency bloc serves as the country's main trading partner. On Thursday, official data revealed that unemployment in eurozone member Greece climbed to 27 percent of the workforce in February compared with 26.7 percent a month earlier. The highest rate was registered for youths aged 15-24, at 64.2 percent. Europe's major stock markets meanwhile posted solid gains on Wednesday, with Frankfurt's main index hitting another record high in the wake of recent robust German industrial data. "With indices sitting on such lofty levels, it's natural investors pause and book profits but that has not changed the overall improved risk-tone we have seen in markets since the ECB cut interest rates last week," said Ishaq Siddiqi, analyst at ETX Capital. "An easing recession in the euro zone, with German economic fundamentals indicating an improvement has soothed fears the region's power house's economy has stalled," he added. Asian equities closed mostly lower on Thursday as dealers took profits after recent impressive gains, but higher than expected inflation figures out of China had little effect on the markets. The falls came despite Wall Street recording another record rise and on Wednesday. "It's more likely the market fell on profit-taking after gains in previous sessions," Haitong Securities analyst Zhang Qi told AFP. "Inflation was only slightly higher than expected, so it had limited impact on the market." In foreign exchange deals, the European single currency dipped to $1.3152 from $1.3156 late on Wednesday in New York. Sterling rallied against the dollar and euro after positive British manufacturing data. On the London Bullion Market, gold edged up to $1,470.96 an ounce from $1,468 Wednesday.