LONDON: European shares partly recovered on Thursday after European Central Bank President Mario Draghi said indications that inflation will recover are weakening and it will have another look at its monetary policy when its council meets in December.
In a prepared speech due to be delivered on Thursday, Draghi the bank would closely monitor the risks to price stability and assess the strength and persistence of the factors that were slowing the return of inflation to levels below, but close to, 2 percent.
"It is highly likely that the ECB will deliver something in December," said Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
"But investors will be more in a wait-and-see attitude over the next couple of weeks because it is still a very shaky environment when it comes to the expectations for the economic outlook. The conviction to have a better growth backdrop going forward is still rather low."
In choppy trading, the pan-European FTSEurofirst 300 index turned positive after early losses, but then gave up its gains again.
It was down 0.3 percent at 1,489.60 points by 0921 GMT, after falling to an intra-day low of 1,482.92 following disappointing updates from some companies.
Shares in Rolls-Royce slumped 17.7 percent, their biggest one-day percentage drop in 15 years, after the British engine-maker downgraded its profit forecast for 2016, its fourth warning in just over a year, blaming sharply weaker demand for spares and services to existing aero-engines.
"Yet another profit warning has shocked investors, with a review of its current shareholder payments policy a major negative," said Keith Bowman, analyst at Hargreaves Lansdown.
"Additional headwinds for selected aerospace and offshore marine markets have been flagged, including sharply lower volumes of corporate jets and ongoing difficulties for its oil-impacted Marine business." RWE was down 7.7 percent after warning it would only barely reach its full-year net profit target.
The third-quarter earnings season in Europe is drawing to a close. According to Thomson Reuters StarMine data, 84 percent of companies in the STOXX Europe 600 index have announced third-quarter results so far, of which 51 percent have met or beaten analysts' forecasts. On the revenue front, only 47 percent of companies have met or surpassed expectations.
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