Investing.com - European stocks closed lower Thursday despite a successful Spanish bond auction, as European Central Bank President Mario Draghi had pessimistic words about the short term economic picture for the euro zone.
At the close of European trade, the EURO STOXX 50 was neutral at 0% change, France’s CAC 40 gave back 0.06%, while Germany’s DAX 30 fell 0.39%.
Launching the bearish sentiment, speaking at a press conference following the ECB's November policy meeting, Draghi said that the bank expects the euro zone economy to remain weak "in the near term", but financial market confidence "has visibly improved on the back of our decisions as regards Outright Monetary Transactions," he added, referrring to the bank's bond buying program unveiled in September.
The comments came after the ECB said it was maintaining the benchmark interest rate at a record-low 0.75%, in line with market expectations
Markets were jittery amid speculation that Thursday’s successful Spanish bond auction would ease pressure on Prime Minister Mariano Rajoy to request a bailout before the end of this year.
Spain sold EUR4.76 billion of three-year, five-year and 20-year bonds, which will allow the country to meet its financing requirements for 2012.
Concerns over Greece remained after the country’s parliament narrowly approved fresh austerity measures needed to secure the next installment of bailout funds late Wednesday, as the measures were likely to exacerbate the country’s recession.
Financial stocks remained broadly higher, as French lenders BNP Paribas and Societe Generale saw shares surge 2.28% and 1.14%, while Germany's Deutsche Bank climbed 0.44%.
Peripheral lenders added to gains, with Italian banks Unicredit and Intesa Sanpaolo advancing 0.41% and 0.66%, while Spain's BBVA and Banco Santander jumped 1.25% and 1.27%.
Among earnings, Repsol said quarterly profit jumped because of increased production, sending shares up 2.40%.
Meanwhile, Swiss Re rallied 1.60% after saying smaller losses from natural disasters helped net income surge in the third quarter.
In London, FTSE 100 fell 0.27%, supported by gains in financial stocks.
The Royal Bank of Scotland and Barclays were among the session's top gainers, with shares rallying 1.30% and 1.20% respectively. Lloyds Banking and HSBC Holdings underperformed on the other hand, falling 0.52% and 0.05%.
Meanwhile, mining giants Rio Tinto and BHP Billiton remained on the upside, with shares rising adding 0.26% and 1.02%, while copper producer Xstrata advanced 0.43%.
Elsewhere, consumer goods group Tesco gained 1.03% after announcing earlier a GBP25 million annual investment in British agriculture.
Markets followed lower in the U.S. with the Dow Jones off 0.36%, the broad based S&P 500 lower by 0.40% and the tech heavy Nasdaq down 0.64%.
Investors are looking forward to consumer sentiment numbers from the U.S. and German CPI figures on Friday.