European shares fell slightly yesterday after the European Central Bank kept rates unchanged, with Swedish telecom equipment maker Ericsson and French drinks firm Pernod leading the fall after disappointing updates. 
ECB President Mario Draghi kept borrowing costs at record lows, sticking to his course of ultra-loose monetary policy, and said the bank would start corporate bond purchases and a new round of cheap bank refinancing in June. 
Although details about the corporate bond purchase programme were seen as a boost, the fact that Draghi did not mention the strength of the euro as a concern weighed on stocks, said Anthilia Capital Partners 
fund manager Giuseppe Sersale. 
The euro initially rose after Draghi spoke but later was down against the dollar, as traders weighed the potential for a more hawkish Federal Reserve next week, helping the FTSEurofirst 300 index end off lows and down 0.3%. 
Europe’s bank sector index outperformed to rise 1.4%. 
The new round of cheap ECB money is seen helping the region’s lenders and the sector also saw a rally in Greek banking stocks on signs that Athens and its international creditors were making progress in talks on economic reforms. 
The Italian banking index rose 1.6% after Draghi said Italy’s new bank bailout fund, created this month to boost confidence in the country’s banks, was a “small step” in the right direction. 
However most sectors ended in the red with some investors blaming disappointing earnings updates and profit-taking following gains that brought the FTSEurofirst to touch a three-month high this week. 
Shares in Ericsson slumped 14.6% after it posted first-quarter sales and operating profit lower than markets expected. 
Pernod Ricard fell 4.9% after third-quarter sales came in below expectations as whisky sales in China continued to suffer. 
In spite of yesterday’s declines, Consultinvest fund manager Enrico Vaccari said he expected the recent positive trend to continue amid signs of an improving macro picture. 
Shares in Volkswagen rose 5.1% after the carmaker and reached a deal with US authorities to address excess diesel emissions in nearly 600,000 polluting vehicles that will include buyback offers and a possible fix. Expectations of a deal had already boosted VW shares in the previous session.