A cautious mood took hold of investors Thursday, leaving Europe stock markets mostly flat, as decision day for the European Central Bank and Bank of England loomed large, while Volkswagen AG soared on Porsche Automobil Holding SE deal news. The Stoxx Europe 600 index (XX:SXXP) +0.09% was flat at 257.10. A day prior it closed marginally lower, but snapped a three-day winning streak. Among the big movers, shares of Volkswagen (DE:VOW3) +5.65% soared nearly 6% after the auto maker said Wednesday it will take over in August the rest of Porsche (DE:PAH3) +2.51% that it doesn't already own. Porsche shares rose 2.8%. Shares of Subsea 7 SA (NO:SUBC) -1.76% tumbled over 3%. The Norwegian seabed-to-surface engineering contractor said Chief Financial Officer Simon Crowe will leave as of July. Wall Street returns to action Thursday after a holiday, but the main event for markets will be policy decisions from the European Central Bank and the Bank of England. Market watchers expect the ECB will cut its key lending rate to a record low — a 25 basis-point drop to 0.75%, with a decision due at 1:45 p.m. Frankfurt time, 7:45 a.m. U.S. Eastern. A news conference by ECB President Mario Draghi begins at 8:30 a.m. U.S. Eastern. As well, the Bank of England is expected to boost its quantitative-easing program, with a decision due at 7 a.m. U.S. Eastern. Spanish shares were also under pressure again, continuing profit-taking that set in Wednesday after speculation that the country's bank bailout rescue funds could be delayed. The Spain IBEX 35 index (XX:IBEX) -0.79% stood out in Europe with a 0.6% drop to 7,122.50. Banco Santander SA (ES:SAN) -1.06% SAN +0.30% and BBVA SA BBVA +0.42% (ES:BBVA) -1.15% each dropped more than 1%. The Spanish government will also sell €2 billion to €3 billion in three-, four- and 10-year bonds Thursday. The yield (ES:10YR_ESP) +2.04% on Spain's 10-year government bond was up 9 basis points to 6.46%, according to Tradeweb. Among the major bourses, the German DAX 30 index (DX:DAX) +0.36% inched up 0.2% to 6,573.35, as Volkswagen's rally inspired other auto gains, with a 1.2% rise for Daimler AG (DE:DAI) +1.38% (DE:DAI) +1.38% . The French CAC 40 index (FR:PX1) -0.06% fell 0.2% to 3,262 and the FTSE 100 index (UK:UKX) +0.19% rose 0.1% to 5,691.19.
