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* Weak material prices hurt resource stocks
* Bank stocks track lower yields
* Ad firm WPP jumps as dividend reinstated
* Delivery Hero slips after Instashop buyout
(Adds details, updates to close)
By Sruthi Shankar and Ambar Warrick
Aug 27 (Reuters) - European equity markets ended lower on
Thursday with resource stocks weighing the most, while an
aggressive growth strategy from the U.S. Federal Reserve was met
with little fanfare locally.
The pan-European STOXX 600 index closed down 0.6%,
with mining stocks ranking among the biggest percentage
losers as raw material prices retreated.
Local stocks also lagged their peers in the United States,
with Wall Street indexes touching new highs after the Fed
announcement. European shares are yet to recover entirely from
lows hit during the pandemic, unlike Wall Street.
"Europe is lacking those mega tech stocks that have been
driving the S&P 500 and the Nasdaq. (U.S. stocks) also know the
Fed is willing to do whatever it takes," said Connor Campbell,
analyst at spreadbetter Spreadex.
The Federal Reserve on Thursday rolled out an aggressive
strategy to restore the United States to full employment and
lift inflation back to healthier levels.
"The Fed's new language gives them the flexibility to let
the economy run a little hotter before contemplating raising
interest rates and gives the green light to more modest yield
curve steepening and dollar weakness," economists at ING wrote
in a note.
European Central Bank chief economist Philip Lane said the
ECB stood ready to prop up inflation in the bloc.
MISSING OUT
Bank stocks retreated as European bond yields fell
after the Fed's announcement.
HSBC fell 1.1% after it came under fresh U.S.
criticism for its reported treatment of customers linked with
the pro-democracy movement in Hong Kong.
A Reuters poll of fund managers showed European stocks are
expected to stall for the rest of 2020 and miss out on the bull
market.
Recent data has also suggested that an economic recovery in
the bloc may be stalling after jumping sharply from
pandemic-driven lows.
Among individual stocks, WPP, the world's biggest
advertising company, jumped 6.5% as it resumed its dividend
after cost cuts and a switch to faster ad production helped it
beat dire forecasts for second-quarter trading.
Smaller rival Publicis rose 2.4%.
German online takeaway food group Delivery Hero
slipped 4.7% after announcing the acquisition of online grocery
service InstaShop.
French conglomerate Bouygues rose 1.3% after
reporting a lower-than-expected core operating loss in the first
half of the year.
Clinical diagnostics company Novacyt jumped 7%
after it launched a test to differentiate between COVID-19 and
common winter diseases.
(Reporting by Sruthi Shankar in Bengaluru
Editing by Anil D'Silva and David Holmes)
