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Europe stocks steady, US dips after BoJ shock, weak US growth

London's benchmark FTSE 100 index firmed a touch but underperformed its peers as the debate on the consequences of a possible British exit from the European Union returned to the fore

European shares held steady Thursday but US stocks dipped, taking a lead from Tokyo which fell heavily as the Bank of Japan shocked traders by deciding against fresh stimulus measures.

The surprise move by the BoJ came a day after the US Federal Reserve provided a positive outlook on the global economy, highlighting mixed signals from the world's leading central banks.

Weak US economic growth data for the first quarter released Thursday and bleak data in Spain, including bloating unemployment figures, seemed to weigh on market sentiment earlier.

But at closing, London and Frankfurt were just in positive territory, while Paris was only marginally lower.

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"After a sharp BOJ-inspired drop this morning, Western equity markets were able to turn slightly higher in the afternoon," City Index analyst Fawad Razaqzada said in a note to investors.

"Sentiment was partly boosted by the still-rallying oil prices as well as robust earnings from Facebook which helped to lift the social network to a fresh all-time high."

The social networking company announced that first-quarter profits tripled from the year-ago period to $1.5 billion, contrasting with disappointing earnings over the last week from Apple, Microsoft and other large technology companies.

World oil prices rebounded to 2016 highs for the third straight day on Thursday, buoyed by the weaker dollar and sliding US production, dealers said.

In the US, the Dow Jones Industrial Average slipped by 0.3 percent after the US Commerce Department estimated first-quarter economic growth at a feeble 0.5 percent, lagging expectations.

"Does it seem like deja vu all over again? You'd be forgiven for thinking it is -- we again look toward Q2 (second quarter) to help spur GDP gains after another weak Q1 (first-quarter) read," Mark Vickery, of Zacks Investment Research, said in an investors' note.

- Tokyo meltdown -

Tokyo's Nikkei index plunged more than 3.5 percent as the Bank of Japan shocked markets by holding fire on a fresh round of widely expected stimulus measures, sparking questions about whether it had anything left in its arsenal to kickstart the stuttering Japanese economy.

"Both foreign exchange and equity markets have given the Bank of Japan's unchanged policy decision the thumbs down, with the yen rising as much as 2.0 percent against the US dollar," said Jeremy Cook, chief economist at foreign exchange group World First.

Traders had widely expected the BoJ to unveil fresh measures to shore up the world's number three economy after this month's deadly earthquakes in southern Japan and a string of weak data.

"It's a total shock," said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors.

"From currencies to equities to everything -- you can see the reaction in the markets. I can't believe this. It's very disappointing."

Weak data on Thursday -- including the biggest fall in Japanese consumer prices for three years -- reinforced the challenge facing authorities in kick-starting growth and igniting inflation in the country.

The much-anticipated Fed meeting on Wednesday decided against hiking US interest rates and stood by its stance that any further rises would be slow and small as economic growth remained relatively weak.

However, its post-meeting statement suggested it was less concerned about the global economic outlook than it was at the start of the year when it cited turmoil in world markets for lowering its forecasts for rate hikes in 2016.

- Key figures around 1645 GMT -

London - FTSE 100: UP 0.04 percent to 6,322.4 points (close)

Frankfurt - DAX 30: UP 0.2 percent at 10,321.15 (close)

Paris - CAC 40: DOWN 0.04 percent at 4,557.36 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,125.43

Tokyo - Nikkei 225: DOWN 3.6 percent at 16,666.05 (close)

Shanghai - Composite: DOWN 0.3 percent at 2,945.59 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 21,388.03 (close)

New York - Dow: DOWN 0.3 percent at 17,994.60

Euro/dollar: UP at $1.1334 from $1.1321 Wednesday

Dollar/yen: DOWN at 108.45 yen from 111.47 yen