Stock prices fall ahead of ECB meeting

Published:  5 Jul at 9 AM

Stock prices in the EU have declined as investor attention turns towards a meeting of the European Central Bank. Shares in energy firms have seen a decline as oil prices retreat from Tuesday’s five-week high. In London, Tullow Oil lost 1.9 per cent and Statoil, the Norwegian gas and oil group, shed 1.6 per cent.

The banks have also seen stock prices fall. The financial community is still coming to terms with the Barclays rate fixing scandal which saw chief executive Bob Diamond step down along with the firm’s chief operating officer.

As Mr Diamond testified in front of the UK Treasury Select Committee yesterday trading was decidedly choppy. Barclays lost 0.6 per cent, the Royal Bank of Scotland dropped 0.9 per cent and Lloyds banking group shed 0.5 per cent.

Analysts are expecting the ECB to pull its key rate back by 25 basis points. However some believe that the bank will have to introduce more market friendly measures if the equity gains made recently are to be sustained.

Across the eurozone figures show that private sector activity in June contracted again. However the pace begun to slow compared to a month earlier according to Markit. A separate survey showed that service sector growth in the UK also slowed down in June.