European stocks fall as Fed dampens easing hopes; DAX down 0.21%

Investing.com - European stocks declined on Thursday, as market sentiment weakened after the minutes of the Federal Reserve’s latest policy meeting dampened hopes for fresh monetary easing measures in the near future.

During European morning trade, the EURO STOXX 50 declined 0.25%, France’s CAC 40 eased 0.06%, while Germany’s DAX 30 fell 0.21%.

In the minutes of its June policy-setting meeting, the Fed indicated that the U.S. economy would have to worsen further before the central bank implements additional easing measures.

While a few policymakers said the bank should ease policy to move the economy toward its targets for full employment and stable prices, others indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.

Meanwhile, risk sentiment also remained under pressure after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.

Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.

Software company Temenos was one of the session’s top losers, with shares diving 19.76% after reducing its forecast for 2012 revenue growth. The company also said CEO Guy Dubois will step down for personal reasons and be replaced by David Arnott, who’s currently the chief financial officer.

The telecom sector was also broadly lower, led by Telecom Italia, down 5.33%, while Telefonica and France Telecom tumbled 2.13% and 1.06% respectively.

On the upside, French retailer Carrefour rallied 4.39%, after saying earlier that second-quarter revenue fell 0.3% to 21.7 billion euros, less than analysts’ estimates.

Meanwhile, financial stocks were mixed. Shares in French lenders BNP Paribas and Societe Generale rose 0.70% and 0.06%, while Germany’s Deutsche Bank and Commerzbank declined 0.53% and 0.48%.

In London, commodity-heavy FTSE 100 dropped 0.35%, weighed by losses in mining stocks.

Rio Tinto saw shares plummet 2.28% and BHP Billiton tumbled 1.63%, while copper producers Xstrata and Kazakhmys retreated 1.50% and 0.28%.

Energy stocks also contributed to losses as oil and gas major Anglo American plunged 1.95%, while BP saw shares edge down 0.09%.

In the financial sector, HSBC Holdings dropped 1.38% and the Royal Bank of Scotland declined 0.22%, while Lloyds Banking ad Barclays fell 0.18% and 0.07% respectively.

Elsewhere, Aegis Group skyrocketed 45.46%, after Dentsu Inc., a Japanese advertising company agreed to buy the U.K. firm in a deal valued at about GBP3.16 billion.

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.33% decline, S&P 500 futures signaled a 0.32% drop, while the Nasdaq 100 futures indicated a 0.24% loss.

Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.