Europe open: Shares down on cautious response to Fed, EZ survey

The pan-European Stoxx 600 index was down 0.21% at 503.27. Spain's IBEX beat the trend as the OECD boosted the country's GDP growth forecasts for this year to 1.8%, while Britain's FTSE 100 continued its rise.

"Today’s somewhat indecisive start in Europe has highlighted the mixed feelings around yesterday’s FOMC interest rate decision, with (chair) Jerome Powell treading a fine line given the recent uptick in inflation pressures," said Market Scope analyst Joshua Mahony.

"The past month saw market expectations for the first Fed rate cut pushed from June to December, although Powell managed to moderately lift hopes of an earlier shift in November. All eyes turn to Friday’s US jobs report, with the average earnings figure expected to remain at a concerning 4.1%."

"With the quarterly employment cost index having surged to a lofty 1.2% this week, there is a distinct risk that we could similarly see average earnings strengthen to throw another curveball in the direction of the Fed."

In economic news, the malaise in eurozone manufacturing activity worsened last month on the back of anaemic demand despite price cuts at the factory gate, with companies axing more jobs as a result, a survey showed on Thursday.

HCOB's final eurozone manufacturing Purchasing Managers' Index (PMI), fell to 45.7 in April from March's 46.1, and below the 50 mark denoting growth in activity. The figure was just ahead of a 45.6 preliminary estimate.

"What is going to rescue the euro zone economy? While this is a difficult question, one thing is clear: It's not the manufacturing sector. Instead, this sector is prolonging its drawn out recession into April," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

"In a bid to dampen the adverse impact of lower new order intakes on production, euro area manufacturers made further inroads into their backlogs of work in April," The rate of depletion was sharp overall and marginally faster than that seen in March. Job losses were nevertheless sustained, extending the current period of falling employment that started in June last year."