By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks slipped Wednesday, with
a pull back in shares of broadcaster Mediaset SPA weighing on the
benchmark index after it reached a six-year high.
The Stoxx Europe 600 index gave up 0.2% at 341.28. It ended
Tuesday's session with its strongest closing level since January
2008, at 341.89.
British briefly pared losses after the Bank of England indicated
it will leave its key interest rate on hold at 0.5% for the time
being, but stocks eventually resumed their move toward session
lows.
Edging back from fresh highs, European stocks gained no traction
after the European Central Bank's chief economist said the
low-inflation environment in the euro zone has policy makers
considering measures to address the issue. Measures may include
issuing a negative deposit rate on bank deposits. Such a move could
prompt banks to make loans instead of depositing any surplus of
money overnight at the ECB.
"As the inflation outlook keeps on worsening, the pressure for
the ECB to intervene is reinforced," Societe Generale economist
Herve Amourda who in a note also said French consumer prices,
released Wednesday, in April "surprised on the downside."
Highlighting weakness in the euro-zone's recovery, figures from
the European Union's statistics agency showed industrial output in
March was down 0.3% from February, and by 0.1% from the same month
a year ago.
Among country-specific stock indexes, Germany's DAX 30 index
turned lower, slipping by 0.1% to 9,745.46 after Tuesday's close at
an all-time record high. Earlier Wednesday, EU-harmonized German
inflation came in at 1.1% in April, which was broadly in line with
forecasts.
France's CAC 40 index fell 0.2% to 4,495.76.
Standing out as the largest decliner on the Stoxx 600 index was
Mediaset , falling 7.4% after the Italian broadcaster swung to a
first-quarter loss of EUR12.5 million ($17.14 million), weighed by
its domestic unit.
First-quarter results for Mediaset came in below expectations,
and second-quarter advertising trends "are poor," said analysts at
Barclays on Wednesday. "On this basis, we feel the shares discount
too much recovery."
In London, ITV PLC fell 5.8% after the British broadcaster
issued a trading update. The U.K.'s FTSE 100 index shed 0.1% at
6,865.01. It ended Tuesday's session higher by 0.3%.
But Compass Group PLC shares pushed up 1.4% in London after the
food services company said it will return 1 billion pounds ($1.68
billion) to shareholders in a special dividend. The move follows an
increase in first-half profit supported by growth in North America
and emerging markets.
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