European stocks drop before ECB

European stock markets dropped Thursday, with investors looking ahead to a monetary policy update from the ECB, while the airline sector took a hit following a bleak outlook from EasyJet.

Around 1015 GMT, London's benchmark FTSE 100 index was down 0.5 percent compared with Wednesday's close.

Sentiment was hit also by official data showing British retail sales sank in June by the heaviest amount in six months -- though on poor weather rather than uncertainty in the run-up to the Brexit vote.

In the eurozone Thursday, Frankfurt's DAX 30 lost 0.3 percent and the Paris CAC 40 fell 0.5 percent in midday deals. The euro rose versus the dollar.

The European Central Bank is not expected to announce any new measures at its regular policy meeting on Thursday, but could flag fresh stimulus in September as the real economic fallout from Brexit makes itself felt, analysts said.

With no more rate cuts or other policy measures on the cards just yet, investor attention will focus on what ECB chief Mario Draghi has to say about the possible repercussions for the euro area from Britain's shock vote on June 23 to quit the European Union, ECB watchers said.

"The main event today comes from the ECB with the press conference from Mario Draghi likely to supersede the rate decision in terms of importance, as traders look to the president to see if there are any hints towards further monetary easing being considered in the coming months," said David Cheetham, analyst at XTB trading group.

Analysts meanwhile expect more stimulus from Japan, while the Bank of England has given a strong hint that it plans some form of monetary easing next month.

- Flying low -

On the corporate front, shares in EasyJet slid 6.0 percent to 1,059 pence, as the boss of the British no-frills airline warned that carriers are facing one of their most challenging periods "for a long time", with peak summer bookings hit by terror attacks and Brexit uncertainty.

EasyJet chief executive Carolyn McCall's comments to reporters came after the airline published a third-quarter trading update that failed to provide a full-year profits forecast.

The airline's update weighed also on rivals, with shares in British Airways owner IAG shedding 3.9 percent to 404.5 pence and German carrier Lufthansa slumping 7.4 percent to 10.28 euros.

The absence of annual profits guidance "is not reassuring and highlights the wide range of potential outcomes, even at this late stage of the year", said Gerald Khoo, analyst at broker Liberum.

Asian stock markets mostly rose Thursday following a fresh record on Wall Street.

After a slight stumble Tuesday and Wednesday caused by profit-taking, the equities rally resumed with Tokyo again leading the pack following a report that Japan is planning a new, giant stimulus programme.

Prime Minister Shinzo Abe is eyeing a package of at least 20 trillion yen -- about double the size initially expected -- to kickstart the economy from years of slumber and light a fire under torpid inflation, Kyodo News agency said.

- Key figures around 1015 GMT -

London - FTSE 100: DOWN 0.5 percent at 6,697.36 points

Frankfurt - DAX 30: DOWN 0.3 percent at 10,111.56

Paris - CAC 40: DOWN 0.5 percent at 4,356.81

EURO STOXX 50: DOWN 0.5 percent at 2,951.00

Tokyo - Nikkei 225: UP 0.8 percent at 16,810.22 (close)

Hong Kong - Hang Seng: UP 0.54 percent at 22,000.49 (close)

Shanghai - Composite: UP 0.4 percent at 3,039.01 (close)

New York - DOW: UP 0.2 percent at 18,595.03 (close)

Euro/dollar: UP at $1.1023 from $1.1016

Pound/dollar: UP at $1.3219 from $1.3197

Dollar/yen: DOWN at 105.69 yen from 106.87 yen