LONDON: European stock markets dipped Thursday while US shares got off to a hesitant start, as the European Central Bank kept borrowing costs steady despite criticism from powerhouse Germany.
Small losses in Frankfurt, London and Paris in mid afternoon trades were largely unchanged from before the ECB's announcement, while Wall Street was also steady after a rash of earnings reports.
Analysts said ECB chief Mario Draghi had opted for stability after last month's bazooka raft of stimulus measures that included an interest rate cut, but that he hinted more could be on the cards.
"The euro rallied back towards 1.14 against the dollar today and could well build on these gains following a relatively uneventful policy announcement and press conference from the ECB," said Oanda analyst Craig Erlam in an investors' note.
"While we expected the former, Mario Draghi has a knack of creating havoc in the markets, something he clearly tried to avoid today with his discrete hints that further rate cuts remain on the table while not giving any indication that this would be the preferred option."
World oil prices extended Wednesday's gains after data showed US production fell to 18-month lows, while Iraq pushed for a fresh meeting of crude majors on limiting output.
"Market action was subdued on Thursday morning ahead of the latest policy meeting of the ECB but a new 2016 high for the price of oil has kept nerves in check," CMC Markets analyst Jasper Lawler said earlier.
The Frankfurt-based central bank had not been expected to add to the measures unveiled on March 10 but all eyes were trained on Draghi during his traditional post-rate decision press conference for signs of future action.
While inflation remains stubbornly far below the ECB's target 2.0 percent, Draghi insisted to reporters that the ECB's stimulus measures have been "effective" but needed time to take hold.
"While we think that further action will be needed to push inflation towards the 'below, but close to, 2 percent' target, the ECB is probably nearing its limits," Jennifer McKeown, economist at Capital Economics, said in an investors' note.
Asian stock markets rallied again Thursday. With a positive vibe flowing across trading floors, investors shifted out of safe-bet assets such as the yen, which helped Japan's Nikkei record a third-straight gain.
A weaker yen tends to boost the Japanese stock market because it hands a major boost to exporters.
New York investors had provided a solid platform for their Asian counterparts, thanks partly to rebounding crude prices.
Analysts said confidence has been buoyed in recent weeks by a string of healthy data out of China, the world's number two economy, and the Federal Reserve's shift to put off any interest rate hikes until after June.
Back in Tokyo, shares in carmaker Mitsubishi Motors crashed 20 percent, extending Wednesday's 15 percent dive -- and wiping billions off its value -- on news it falsified fuel-efficiency tests on hundreds of thousands of vehicles.
Mitsubishi's value has plunged $2.5 billion in two days after admitting it falsified fuel-efficiency tests in more than 600,000 vehicles. Testing was manipulated to boost fuel economy rates above the cars' actual level.
Japanese transport ministry officials on Thursday entered one of the firm's research and development centres in Nagoya, in a sign the government may slap it with heavy fines over the scandal, local media said.
- Key figures around 1345 GMT -
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London - FTSE 100: DOWN 0.7 percent at 6,363.32 points
Frankfurt - DAX 30: DOWN 0.4 percent at 10,376.36
Paris - CAC 40: DOWN 0.6 percent at 4,564.29
EURO STOXX 50: DOWN 0.2 percent at 3,135.34
Tokyo - Nikkei 225: UP 2.7 percent at 17,363.62 (close)
Shanghai - Composite: DOWN 0.7 points at 2,952.89 (close)
Hong Kong - Hang Seng: UP 1.8 percent at 21,622.25 (close)
New York - Dow: DOWN 0.2 percent at 18,055.01
Euro/dollar: UP at $1.1348 from $1.1296 on Wednesday
Dollar/yen: DOWN at 109.74 yen from 109.81 on Wednesday
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