Europe midday: Investors mull Fed announcement and earnings
European stocks were flat as investors took in the Federal Reserve's policy announcement on Wednesday and a range of corporate earnings.
At midday, the benchmark Stoxx Europe 600 was flat, Germany’s DAX was down 0.10% and France’s CAC 40 was up 0.15%. In London, the FTSE 100 was up 0.33% as the Bank of England stood pat on interest rates and asset purchases, as widely expected.
Meanwhile oil prices rose, with West Texas Intermediate up 0.5% to $54.16 per barrel and Brent crude rising 0.8% to $57.25.
Markus Huber trader at City of London Markets said: “European shares are trading little changed to moderately lower this morning in the aftermath of yesterday's evening FOMC decision. Pretty much as expected the FOMC meeting turned out to be a non-event and consequently only having a minor impact on market. Similar is expected when the BOE is meeting today, although inflation has risen faster than expected over the past few months, so far there seems to be little urgency in raising rates anytime soon.”
Market participants were digesting the latest rate announcement from the Federal Reserve late on Wednesday. The bank kept its main policy settings unchanged, as it waited for greater clarity on the new administration's fiscal plans. Since its last meeting, activity in the jobs market had continued to strengthen and economic activity to expand at a moderate pace, the Fed said.
However, unlike at its previous meeting in mid-December, rate-setters pointed out how measures of consumer and business sentiment had improved of late.
Regarding prices, inflation was still below the Fed's 2.0% target, the Fed said, adding that "market-based measures of inflation compensation remain low."
"Near-term risks to the economic outlook appear roughly balanced," the Fed also reiterated in its statement.
Monetary policymakers in Washington DC kept the range for the Fed funds rate at between 0.50% and 0.75%, as expected.
In corporate news, Deutsche Bank was under the cosh as it posted a €1.9bn net loss for the fourth quarter, falling short of expectations as legal costs took their toll.
Novo Nordisk slumped after downgrading its 2017 sales outlook and Daimler fell on the back of a cautious 2017 profit outlook despite posting a jump in fourth-quarter net profit.
AstraZeneca retreated as the pharmaceuticals company cautioned that revenue and profit was set to decline this year as generic versions of its cholesterol drug Crestor dent sales.
Vodafone was also in the red after saying revenue in the third quarter declined by 3.9% and that earnings would be at the lower end of its previous guidance.
Consumer goods company Reckitt Benckiser rallied after confirming that it is in “advanced negotiations” to buy US baby food maker Mead Johnson for around $16.7bn, a move which could bolster its health products business.
Nokia was also on the front foot as the Finnish telecommunications group’s fourth-quarter net profit came in ahead of expectations, while oil giant Shell gained ground despite reporting a 44% drop in fourth-quarter profit as it maintained its dividend.
French water utility company Veolia was in the green as its chief executive Antoine Frerot announced plans to cut costs by €600m over the next three years in order to combat challenging market conditions and political uncertainty.