European stocks closed lower Thursday as investors reacted to the Bank of England’s decision to leave interest rates unchanged.
The pan-European Stoxx 600 closed down by 0.7% provisionally, with basic resources falling over 2% to lead losses as most sectors and major bourses slid into negative territory.
The Bank of England said on Thursday it was keeping benchmark interest rates at an all-time low of 0.1% and left the size of its bond-buying program unchanged at £745 billion ($981 billion).
Sterling climbed 0.4% to notch a fresh five-month high of $1.317 shortly after the announcement, but slightly pared gains as the European trading session progressed.
The BOE said the U.K.’s gross domestic product (GDP) was expected to have fallen 20% in the second quarter when compared to the final three months of last year. The Monetary Policy Committee’s central projection was for U.K. GDP to continue to recover beyond the near term, but it warned that the economy was unlikely to exceed its pre-pandemic level until the end of 2021.
On Wall Street, stocks were mixed as investors continued to monitor the ongoing brinkmanship between U.S. lawmakers over a new prospective stimulus package. President Donald Trump’s administration threatened on Wednesday to act on its own to provide coronavirus relief after another day of talks on Capitol Hill failed to result in an agreement.
Traders also monitored simmering tensions between the U.S. and China, the world’s two largest economies.
Looking at individual stocks, French diagnostics company Eurofins surged to the top of the European benchmark. Shares of the Paris-listed stock jumped more than 17% after the firm launched a new, lower-cost product to detect the coronavirus.
Meanwhile, British engineer Meggitt tumbled over 4% amid speculation the company may need to raise new equity in the wake of the coronavirus pandemic. The company said in a statement on Thursday that its financial and liquidity position remained robust, Reuters reported.