RTTNews - The European markets fell for the third day on Thursday, as mining stocks declined and the European Central Bank left its benchmark interest rate unchanged and said it expected a much sharper recession this year in the euro zone than earlier forecast.
The ECB and the Bank of England today maintained their benchmark interest rates at record lows.
Eurozone real gross domestic product is now expected to contract between 5.1% and 4.1% in 2009, ECB President Jean-Claude Trichet said. In March, the ECB had forecast the economy to contract between 3.2% and 2.2% in 2009.
The U.S. Labor Department said in a report that initial jobless claims fell to 621,000 the week ended May 30th from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week.
Crude for July delivery rose $2.69 to $68.81 a barrel on the New York Mercantile Exchange, by the time the European markets closed, as the dollar weakened and Goldman Sachs said prices may reach $85 this year.
The FTSEurofirst 300 index of pan-European blue chips closed 0.18% lower at 866.56 points, while the narrower DJ Stoxx 50 index fell 0.09% to 2,131.10 points.
Around Europe, the U.K.'s FTSE 10 index rose 0.08% to 4,386.94, while France's CAC 40 index advanced 0.07% to 3,312.03 and Germany's DAX index surged up 0.20% to 5,064.80.
Rio Tinto led mining stocks lower, falling 6.6%, after reports said the world's third largest miner is considering a plan to raise as much as $15 billion in a stock sale after rejecting an investment from Aluminum Corp. of China.
Rio Tinto said in a statement that it is pursuing a range of options, some of which are at an advanced stage, for maximizing shareholder value and improving the Group's capital structure.
Other mining stocks also slipped after copper, lead and nickel retreated in London. BHP Billiton, the world's biggest miner, fell 2.5%, while Anglo American, the second biggest, declined 1.9% and Copper miner Antofagasta dropped 3.1%. Kazakhmys, Kazakhstan's biggest copper producer, lost 5.3%.
Elsewhere, Corio, the biggest Dutch property developer, dropped 5.7% after the company raised ?258 million selling new shares to strengthen its balance sheet and finance possible takeovers.
On the other hand, heavily weighted oil stocks gained after crude oil prices advanced. BP, Europe's biggest oil company, rose 1%, while Royal/Dutch Shell, the second biggest, surged up 1.3% and Total, the third biggest, climbed 1.4%.
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