By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets retreated on Thursday after more disappointing German data fueled concerns about the region's growth prospects and the European Central Bank left interest rates unchanged.

The losses came after the major indexes snapped a two-day losing run on Wednesday, boosted by a raft of healthy earnings reports.

ECB decision: The region's central bank, as expected, left interest rates unchanged, keeping the main lending rate at 0.05% and the deposit rate at minus 0.2%.

Attention now turns to ECB President Mario Draghi's news conference at 1:30 p.m. London time. or 8:30 a.m. Eastern, where questions on corporate bond purchases are likely to be a main point.

Leading up to Thursday's decision, Reuters reported that strains between Draghi and fellow policy makers are becoming more pronounced, which could also be a topic of the news conference. Read: ECB discord could 'neuter' Draghi's power

The Bank of England also left interest rates unchanged.

Data: Industrial data for Germany in September took markets by surprise on Thursday, showing that new orders rose by 0.8%, well short of economists' estimates of a 2% rise. However, data for August were revised to show the drop then wasn't as deep as originally reported.

Christian Schulz, senior economist at Berenberg, said in a note that the country's rough patch, which started in early spring, was likely to weigh on growth in the second half of 2014.

"But the evidence is mounting that Germany will probably not have a mild technical recession," or two consecutive quarters on negative growth, he said.

Market reaction: The Stoxx Europe 600 index fell 0.4% to 334.88, after scoring a 1.7% gain on Wednesday. Read: AstraZeneca slides; Adidas jumps: Europe's big stock movers

France's CAC 40 index lost 0.3% to 4,198.07, while Germany's DAX 30 index gave up 0.2% to 9,299.35. The U.K.'s FTSE 100 index fell 0.2% to 6,528.98.

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