European stocks show nerves amid rate calls

European stocks showed a nervous streak on Thursday against a background of interest rate decisions in the eurozone and Britain, falling by about half a percentage point.

A day after big gains, London's FTSE 100 index of top shares was showing a mid-day fall of 0.59 percent to 5,077.75 points.

In Frankfurt, the DAX 30 slid 0.47 percent to 5,418.45 points and in Paris the CAC 40 dipped 0.42 percent to 3,654.91.

The DJ Euro Stoxx 50 index of top eurozone shares shed 0.62 percent to 2,746.27 points.

The Bank of England (BoE) decided to inject billions of extra pounds into the British economy and held interest rates at a record low.

The European Central Bank (ECB) also left leave its benchmark lending rate unchanged at 1.0 percent.

On Wednesday, the US Federal Reserve had held rock-bottom interest rates for "an extended period" and kept trillion-dollar stimulus measures in place to support a fragile recovery from recession.

"Markets tend to favour stability, so soothing words from the Fed that rates would be low for 'an extended period' may calm investors nerves," said ODL Securities analyst John Murphy.

European equities had staged a spirited rally on Wednesday, recovering from sharp falls a day earlier on reassuring economic data from the United States and positive corporate results.

But in Asia on Thursday, Tokyo closed down 1.29 percent at a one-month low, depressed by a lacklustre performance on Wall Street and caution over earnings results from Toyota Motor.

The benchmark Nikkei-225 index fell to 9,717.44 points, the lowest close since October 6.

Hong Kong shares closed down 0.63 percent Thursday on profit-taking after the previous day's rebound.

Investor sentiment was weak as Wall Street saw a rally fizzle after the US Federal Reserve's statement offered no surprises in its outlook or monetary policy.

"Nothing is more frustrating than not being able to see when our concerns (about the health of the US economy) will be ending," Shinichiro Matsushita, a market analyst at Daiwa Securities, told Dow Jones Newswires.

He added that investors were also cautiously awaiting the outcome of US jobs data Friday.

As expected, the US Federal Reserve held its key federal funds rate at a historic low of zero to 0.25 percent, where it has been since last December to help pull the economy out of the worst downturn since the Great Depression.

New York's Dow Jones Industrial Average closed up 0.31 percent at 9,802.14 points on Wednesday.