Europe stocks pause as investors mull ECB 'damp squib'

Europe's main stock markets hit the pause button Friday as investors mulled the European Central Bank's reticence on future stimulus moves.

In the eurozone, Paris stocks drifted 0.09 percent lower at the close while Frankfurt shares rose just 0.09 percent.

Milan stocks ended the day up 0.15 percent as shares in troubled bank Monte Paschi di Siena rocketed ahead of a new business plan, which will be unveiled on Monday.

The stock closed up 13 percent on Friday, and has soared nearly 40 percent this week -- though it remains 80 percent below its price at the start of the year.

London's benchmark FTSE 100 index closed down after British American Tobacco shares gave up their earlier gains to finish 2.85 percent lower.

The group has launched a blockbuster $47-billion (43-billion-euro) bid for control of US peer Reynolds American but the stock's gains unwound on reports it could be rejected.

"The $56.50 per share offer is just above the record high for Reynolds shares reached in June, and given that no formal discussions have yet been had between management, could be rebuffed," said Jasper Lawler, market analyst at CMC Markets.

US stocks were mostly lower Friday, but Microsoft surged to an all-time high after reporting first quarter results that were well above expectations.

Around mid-day in New York, The Dow Jones Industrial Average fell 0.2 percent to 18,124.45 points.

The broad-based S&P 500 also dropped 0.2 percent, while the tech-rich Nasdaq Composite Index was up a slight 0.27 percent.

- 'Damp squib' -

European equities had climbed higher on Thursday after the ECB opted against changing the size and scope of its bond-buying stimulus programme.

ECB chief Mario Draghi had dismissed reports the bank was considering gradually tapering its stimulus, but he added it was "unlikely" there would be an abrupt end to bond purchases.

"It was a bit of a damp squib yesterday," Will Hamlyn, senior equity investment analyst at Manulife Asset Management, told AFP.

"He (Draghi) kept his cards close to his chest and did not really let on anything, so everyone is wondering what he is going to say in December."

The ECB stimulus scheme, known as quantitative easing (QE), involves the purchase of public and private bonds at the rate of 80 billion euros per month, and is currently set to end in March 2017.

Asian markets diverged Friday following news of a strong earthquake in Japan.

"As often when there is an earthquake, the yen is bought" as Japanese investors repatriate funds, said Simon Pianfetti, a senior manager at the market solutions department at SMBC Trust Bank Ltd.

Computer-controlled orders are programmed to react instantly to news of earthquakes measuring greater than 6.0 magnitude or so, he told Bloomberg News.

Tokyo's Nikkei 225 index, which was up at the lunch break, slipped 0.30 percent to end a five-day winning streak.

Markets in Hong Kong were closed for the day as Typhoon Haima lashed the city, forcing schools and many businesses to shut.

- Key figures around 1600 GMT -

London - FTSE 100: DOWN 0.09 percent at 7,020 (close)

Frankfurt - DAX 30: UP 0.09 percent at 10,710 (close)

Paris - CAC 40: DOWN 0.09 percent at 4,536 (close)

EURO STOXX 50: DOWN 0.03 percent at 3,075

Tokyo - Nikkei 225: DOWN 0.3 percent at 17,184.59 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 23,374.40 (Thursday close)

Shanghai - Composite: UP 0.21 percent at 3,090.94 (close)

New York - Dow: DOWN 0.2 percent at 18,124.45

Euro/dollar: DOWN at $1.0864 from $1.0928 Thursday

Dollar/yen: DOWN at 103.87 yen from 103.99 yen

Pound/dollar: DOWN at $1.2197 from $1.2254

Euro/pound: DOWN at 89.06 pence from 89.18 pence

Oil - West Texas Intermediate: DOWN 5 cents at $50.58 per barrel

Oil - Brent North Sea: UP 19 cents at $51.57