The European markets finished in negative territory on Thursday. The uncertainty surrounding Cyprus continued to weigh on investor sentiment after the country's lawmakers blocked a bank tax and the ECB gave the country an ultimatum. Weaker than expected European economic results also contributed to the negative mood.
Cyprus' President Nicos Anastasiades is likely to present a 'plan B' before the country's political leaders on Thursday in an effort to secure the EUR 10 billion-bailout offered by its European partners.
Cyprus lawmakers on Tuesday overwhelmingly rejected a bank tax proposed by EU in return for the bailout, throwing the entire rescue deal into disarray and raising the possibility of an imminent collapse of the country's banking sector.
Anastasiades will put forward a proposal at a political leaders meeting at 07.30 GMT, which is expected to be put to vote before the Parliament later in the day, the Cyprus New Agency (CNA) reported Wednesday citing government sources.
In Moscow, Finance Minister Michalis Sarris is expected to continue talks with Russian authorities on possible financial assistance on Thursday.
The European Central Bank announced that it will stop emergency funding to Cypriot banks on Monday, if the troubled country fails to agree on a bailout program with its European partners by then.
In a statement released on Thursday, the Frankfurt-based central bank said, "the Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013."
However, the bank said for it to continue emergency lending thereafter, Nicosia should adhere to the bailout conditions set by the EU and the International Monetary Fund.
"The ELA "could only be considered if an EU/IMF program is in place that would ensure the solvency of the concerned banks," the ECB said in the statement.
Eurozone consumers are likely to remain largely cautious in their spending in the near term, with economic fundamentals remaining generally poor in most of the member countries amid high unemployment and muted purchasing power, IHS Global Insight economist Howard Archer said Thursday.
The firm noted that the fact that consumer confidence is struggling to develop significant upward momentum and remains at historically low levels in many countries reinforces suspicion that it is unrealistic to expect any marked overall pick up in personal expenditure in the near term at least.
The Federal Reserve on Wednesday voted to maintain its highly accommodative monetary policy in light of a U.S. economic recovery that is proceeding at a moderate pace.
The central bank said it will continue to buy treasuries and mortgage-related assets at a pace of $85 billion a month, and maintained its benchmark for hiking interest rates at a 6.5 percent unemployment rate.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.95 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.54 percent.
The DAX of Germany dropped by 0.87 percent and the CAC 40 of France fell by 1.43 percent. The FTSE 100 of the U.K. decreased by 0.72 percent and the SMI of Switzerland finished down by 1.09 percent.
In Frankfurt, Lanxess, which expects lower earnings in the first quarter, sank by 6.13 percent.
HeidelbergCement fell by 1.53 percent, after Kepler downgraded its rating on the stock.
Electronics manufacturer Kontron decreased by 3.67 percent. The company reported lower revenues and cut its dividend.
Beiersdorf finished higher by 0.21 percent. The stock was upgraded to ''Buy'' from ''Neutral'' at Citigroup.
Morgan Stanley upgraded Siemens to ''Overweight'' from ''Equalweight.'' The stock climbed by 1.49 percent.
Brenntag increased by 3.29 percent. The company lifted its dividend after annual profit increased 21 percent.
In Paris, Credit Agricole declined by 0.82 percent. BNP Paribas and Societe Generale finished down by 0.52 percent and 0.18 percent respectively.
In London, Next gained 4.12 percent, after reporting higher annual profit and increased dividend.
AstraZeneca climbed by 3.06 percent. The drug-maker announced another 2,300 headcount reductions in its SG&A activities globally and revealed its strategy to return to growth.
Lloyds Banking Group declined by 1.12 percent and HSBC fell by 0.98 percent. Barclays decreased by 0.20 percent and Standard Chartered lost 0.49 percent.
Nestle dipped by 0.51 percent in Zurich, despite an upgrade at Citigroup.
The downturn in Eurozone's private sector unexpectedly intensified in March, at a time when the region's financial sector fell into a fresh turmoil due to Cyprus' bailout debacle, dampening prospects of a near-term recovery following the fourth quarter's economic contraction.
Preliminary results of the purchasing manages' survey compiled by Markit Economics showed that an indicator measuring activity at Eurozone's private sector dropped to 46.5 in March from 47.9 in February. The rate of contraction accelerated for the second straight month. Economists had forecast the index to rise to 48.2.
Germany's private sector output growth eased further from January's 19-month high, reflecting a contraction in manufacturing and slower growth in services, preliminary data from Markit Economics showed Thursday. The seasonally adjusted flash composite output index came in at 51 in March, down from 53.3 in February. This was the lowest reading for three months.
Activity in the French manufacturing sector decreased at a faster rate in March than expected by economists, latest data showed Thursday. The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector came in at 43.9 in March, and stayed below the no-change 50 mark that separates growth from contraction, preliminary estimates from a survey by Markit Economics and HSBC Bank showed. The latest reading was unchanged from that of February, and was below 44.2 forecast by economists.
U.K. retail sales grew more-than-expected in February lifting hopes that the economy can avoid a "triple dip" recession despite limited spending capacity among consumers, the latest data from the Office for National Statistics showed Thursday.
The ONS said retail sales volume including automotive fuel rose 2.1 percent month-on-month in February, the biggest since March 2012, when it rose 2.2 percent. The rate of growth was much stronger than the 0.4 percent increase expected and reversed the 0.7 percent drop logged in January.
A separate report showed that the budget deficit narrowed more than expected in February as the government received the second installment of cash transfer from the Bank of England and proceeds from the 4G spectrum auction.
First-time claims for U.S. unemployment benefits showed a modest rebound in the week ended March 16th, according to a report released by the Labor Department on Thursday, although claims still came in below economist estimates.
The report said initial jobless claims edged up to 336,000, an increase of 2,000 from the previous week's revised figure of 334,000. Economists had expected jobless claims to climb to 340,000 from the 332,000 originally reported for the previous week.
Existing home sales in the U.S. saw a modest increase in the month of February, according to a report released by the National Association of Realtors on Thursday, with sales reaching their highest level in over three years.
NAR said existing home sales rose 0.8 percent to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January. Economists had been expecting existing home sales to climb to an annual rate of 5.01 million from the 4.92 million originally reported for the previous month.
Philadelphia-area manufacturers responding to a survey from the Federal Reserve Bank of Philadelphia unexpectedly reported slight increases in business activity in the month of March.
A report released by the Philly Fed on Thursday showed that its diffusion index of current activity climbed to a positive 2.0 in March from a negative 12.5 in February, with a positive reading indicating an increase in regional manufacturing activity.
The jump into positive territory came as a surprise to economists, who had been expecting the index to climb to a negative 1.5.
Leading U.S. economic indicators rose by slightly more than expected in the month of February, according to a report released by the Conference Board on Thursday, with the leading indicators index rising for the third consecutive month.
The Conference Board said its leading economic index rose by 0.5 percent in February, matching the revised increase seen in January. Economists had expected to index to increase by 0.4 percent compared to the 0.2 percent increase originally reported for the previous month.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.