LONDON (Alliance News) - Global stock indices lost a few points, while the euro has risen to a high of the day against the dollar, following the decision by the European Central Bank to leave it's interest rates unchanged.
The ECB left its benchmark rate unchanged at 0.25%, leaving markets poised for president Mario Draghi's press conference still to come at 1230 GMT.
"The significant threat of deflation in the Eurozone has resurfaced but the ECB?s hand hasn?t been forced quite yet to cut interest rates further from the current record low," said CFXMarkets managing director Dennis de Jong.
Heading in to the press conference the FTSE 100 is just fractionally higher at 6,661.92, the FTSE 250 is down 0.2% at 16,387.47, and the AIM All-Share is up 0.1% at 852.20.
In Europe, both the French CAC 40 and the German DAX 30 have slipped slightly since the ECB decision and are both down about 0.2%.
The euro made a small spike to a high against the dollar Thursday of USD1,3778, but the range of the single currency remains very small ahead of the press conference.
US Futures have also pared small gains and currently indicate a flat open on Wall Street, with US data still ahead Thursday.
The US Markit services PMI will be released at 1258 GMT, followed by the government non-manufacturing PMI at 1400 GMT. Economists expect the non-manufacturing number to rise strongly to 53.5 in March from 51.6 in February.
The pound remains softer against the dollar after the Makit PMI showed that growth in the UK service sector eased slightly in March, after already showing an easing in the construction and manufacturing sectors growth earlier in the week. The services PMI dropped to 57.6 in March from 58.2 in February, missing expectations a 58.1 print.
"The service sector PMI showed what the construction and manufacturing surveys did - the UK economy has also plateaued," said Brown Brothers Harrimen global head of currency strategy Marc Chandler.
The pound trades at USD1.6590, below the USD1.66 barrier for the first time this week.
While there has been a negative reaction to the headline miss to forecasts, growth remains above trend and analysts suggest that growth will be more sustainable at slightly lower levels. "It is very unlikely that the PMI decline from the heady heights of last year will be any concern for policymakers. They may well be comforted that the PMI?s are returning to more sensible levels after signalling a raging boom late last year," said Berenberg chief UK economist Rob Wood.
Within UK stocks, the banking sector took a knock in late morning trade after the FCA confirmed that it intends to undertake a competition review into the UK's GBP150 billion credit card market at the end of the year. The FTSE 350 banking sector that had been making gains Thursday slipped into the red on the announcement. With Barclaycard the biggest provider of credit cards in Europe, Barclays took the biggest knock, but has since recovered most of the fall and continues to trade up 0.5% Thursday.
Those stocks most exposed to Chinese growth have shown little positivity to the announced Chinese stimulus measures, with the FTSE 350 Industrial Metals sector down 1.5%, and the Mining sector down 0.8%.
China on Thursday announced reforms in the railway sector, an urban redevelopment programme, and tax breaks for small companies, all designed to support the country's 7.5% growth target.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
Copyright © 2014 Alliance News Limited. All Rights Reserved.