(MENAFN- AFP) Europe's main stock markets dropped at the start of trading on Thursday, as investors awaited the outcome of monetary policy meetings being held by the ECB and Bank of England.
London's benchmark FTSE 100 index lost 0.46 percent to 6,508.74 points and Frankfurt's DAX 30 slipped 0.33 percent to 9,284.97.
In Paris, the CAC 40 shed 0.36 percent to stand at 4,193.48 compared with Wednesday's closing value.
"The general mood in the market today is one of caution with traders taking profits from yesterday's rally ahead of the Bank of England and ECB rate setting meetings," said Tony Cross, market analyst at Trustnet Direct dealer group.
European stock markets had rallied on Wednesday as traders welcomed the Republican victory in the US midterm elections.
The gains erased losses posted Tuesday after the European Union slashed its economic forecasts for the eurozone.
Asian stock markets diverged on Thursday following a record-high close on Wall Street.
The European Central Bank is likely to hold fire on any new policy measures Thursday even as the clouds continue to darken over the euro area economy, analysts said.
Despite growing pressure for more action to ward off the spectre of deflation in the single currency area, ECB President Mario Draghi will likely argue that a raft of previous radical measures still need time to make an impact.
In any case, the ECB does not have much room to cut its key interest rate further as it is already at 0.05 percent, an all-time low.
The Bank of England is meanwhile widely expected to keep its main lending rate at 0.5 percent.
"The big news stories of the European session are likely to come out of the central banks, with both the BoE and ECB announcing their latest monetary policy decisions," said Joshua Mahony, research analyst at Alpari trading group.
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