[R]7:00PM Frankfurt, Paris; 1:00 PM New York – The European Central Bank left its key lending rate unchanged at 1% and indicated that economic contraction has ended but the economic recovery is expected to be uneven and bumpy. Steelmakers and miners gained in trading in the region.[/R]

European markets edged lower as investors worldwide turn cautious and worry about stretched valuations. The latest service industry data in the U.S. added to the concerns that the economic recovery is more likely to be anemic and uneven.

In London FTSE 100 Index closed lower 20.80 or 0.43% to 4,796.75, in Paris CAC 40 Index decreased 19.62 or 0.55% to close at 3,553.51, in Frankfurt DAX index lower 18.42 or 0.35% to close at 5,301.42. In Zurich trading SMI decreased 15.52 or 0.25% to close at 6,073.72.

The European Central Bank left its key lending rate unchanged at 1%. The central bank is worried that raising rates now may kill the early economic recovery. The ECB President Trichet said that the economic contraction is coming to an end with the significant stimulus in the pipeline but he expects the economic recovery to be uneven and “bumpy.”

European insurance companies are worried that they may have to raise more capital to meet the revised guidelines issued by the European Commission.

Gainers & Losers

ArcelorMittal advanced 2.6% to €24.65 after the steelmaker said Brazil steel output is expanding.

Arcandor AG rose 1.8% to €0.221

BASF SE fell 3.0% to €34.81 after the chemical maker was downgraded to “reduce” from “neutral” at Nomura Holdings Inc. Bayer AG increased 0.6% to €42.32 after the company and Precision BioSciences Inc formed a joint venture to develop genome modifications programs for customers.

BMW AG slipped 0.2% to €30.39.

Bollore SA rose 2.1% to €116.95 after the investment company said Europe''s highest court Thursday overturned a €23 million fine imposed by the European Commission in 2001 for the company''s role in a paper cartel.

Eramet SA the integrated mining and metallurgical company rallied 3.8% to €224.45.

Jacquet Metals SA climbed 3.9% to €39.50 after the metals producer said a net loss of €11.6 million in the first-half compared to net profit of €6.7 million a year ago.

Pernod Ricard SA declined 2.2% to €52.33 after the producer and distributor of spirits and wines said full-year sales rose 9.3% to €7.2 billion from €6.59 billion a year ago. Net profit in the full-year rose 13% to €945 million compared to net profit of €840 million a year ago.

Technip SA the oilfield services provider added 2.0% to €41.24. ThyssenKrupp AG gained 3.1% to €23.11 on a rally in steel stocks in the region.

Vallourec SA the maker of steel tubes for oil and gas production increased 1.5% to €102.25.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 3.69% followed by losses in BASF SE of 3.19%, in SAP AG of 0.76%, in BMW AG of 0.74%, in E.ON AG of 0.70%.

Salzgitter AG led gainers in the DAX index with a rise of 3.32% followed by increase in Thyssenkrupp AG of 3.13%, in Deutsche Post AG of 2.87%, in MAN SE of 2.83%, in Deutsche Boerse AG of 2.65%.
.
CAC-40 Index Movers

Pernod Ricard SA led the decliners in the CAC-40 index of 4.47% followed by losses in Carrefour SA of 3.12%, in Renault SA of 2.67%, in Societe General SA of 2.05%, L''Oreal SA of 1.60%.