Bourses shrug off ECB rate hold; techs, telecoms still out of favor.

European stock markets fell back toward session lows Wednesday as investors shrugged off the decision to leave euro-zone interest rates on hold and focused on the outlook for higher global rates. The European Central Bank (ECB) left its key refinancing rate unchanged at 3 percent at its monthly meeting in Frankfurt. The FTSE 100 was 1.6 percent lower at 6,556.80 shortly before the start of trading in New York while the Xetra Dax in Frankfurt was down 1.4 percent at 6,497.42. Both markets lost 4 percent Tuesday. The CAC 40 in Paris remained the weakest of the major markets, off 2.7 percent at 5,520.37, while the SMI in Zurich was just 0.6 percent lower at 7,225.80. The OMX index in Stockholm was the weakest bourse, down 4.4 percent on the back of a 6.6 percent slide by market heavyweight Ericsson. The FTSE Eurotop 300, a pan-European gauge that serves as a guide to the overall regional mood, was almost 1.5 percent lower. Its technology stocks lost 8 percent and telecom shares slipped 4 percent, with only metals and mining companies gaining ground In currency markets, the euro gained a cent to reach a session high of $1.0402 in morning trade, helped by dollar weakness and a larger-than-expected drop in Germany’s December unemployment count. The currency traded as high as $1.0404 before giving ground. The single currency lost a little ground ahead of the ECB announcement but recovered to trade around $1.0385 ahead of the U.S. market open. Vodafone AirTouch (VOD) was by far the most heavily traded stock in London, off 2.5 percent as investors continued to exit the highly rated telecom sector. The shares also were hit by reports that German takeover target Mannesmann (FMMN) would require a large cash element before considering any offer. Financial and technology shares also faced the brunt of selling in London, with the latter retreating from a strong year-end performance. Semiconductor designer ARM Holdings (ARM) fell almost 9 percent and computer services firm Logica (LOG) down 7.2 percent.