Market watch

"The ECB stands ready to act to face the current challenges, both with standard and nonstandard measures. However, [Mr.] Draghi stressed the importance of the creation of a commonly shared fiscal consolidation. In a nutshell, we see the ECB to continue to provide support in the direction of reducing the current imbalances. However, its independence is re-affirmed," Newedge economist Annalisa Piazza said. Cyclical stocks were leading the declines, with investors taking advantage of the strong gains in the previous session and taking profits. The Stoxx Europe 600 construction and materials sector was down 1.6%, the basic resources index was 1.4% lower and the insurance index was down 1.3%. Cyclical sectors, which are sensitive to the economy, all rose strongly on Wednesday after the Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank agreed to lower the pricing on existing temporary U.S. dollar liquidity swap arrangements by half a percentage point. However, despite the action, the underlying issues affecting the European sovereign-debt crisis remain unsolved. Indeed, Goldman Sachs said that in the near term it expects European equity markets to fall further as recession is priced in and earnings downgrades accelerate. The investment bank announced a more defensive stance in its portfolio, downgrading the banking, industrial goods and services, basic resources, food and beverages, and autos sectors. It upgraded technology and health care. Meanwhile, euro-zone purchasing managers index manufacturing data were in line with expectations, confirmed at 46.4 in November. The index is at its lowest level since June 2009 but still 13 points higher than its record low. The data had little bearing on markets.