European stocks seesaw as traders await ECB policy decision
Adds analyst's name in paragraph 6
ECB decision at 1315 GMT
SNB cuts rates by 50 bps
Lonza up on plans to exit CHU business
By Sruthi Shankar
Dec 12 (Reuters) -European stocks dipped on Thursday, as investors braced for a rate cut from the European Central Bank and awaited hints on policy moves next year as the euro zone economy struggles with slowing growth and heightened political risks.
After a positive open, the pan-European STOXX 600 index .STOXX slipped 0.1%. Retail stocks .SXRP lagged, while automakers .SXAP led gains.
Rate-sensitive euro zone bank shares .SX7E rose 0.4%.
The ECB is expected to cut interest rates again, with traders pricing in an 81% chance of a 25 bps reduction and a 19% chance of a 50 bps cut, as euro zone inflation nears target and the economy falters. The ECB's rate decision is due at 1315 GMT.
Meanwhile, Swiss stocks got a lift after the Swiss National Bank cut its interest rate by 50 basis points, the biggest reduction in almost 10 years, as it sought to stay ahead of expected cuts by other central banks and cap the rise of the Swiss franc.
"In Europe, they're probably cutting rates too slowly. The economies are slowing and the central banks are really trying to catch up while in the U.S., we see more pre-emptive policy cuts," said MarijaVeitmane, head of equity research at State Street Global Markets.
"That's what we see in financial markets as well, U.S. stocks are outperforming European, the dollar is rallying."
While the STOXX 600 is trading below all-time highs, it is up just 8.5% on a year-to-date basis, compared with a 27.6% gain for the S&P 500 .SPX.
Among stocks, SThree Plc STEMS.L tumbled 26% after the British recruiter warned on the current financial year profit, citing tough hiring market conditions amid increased political and macro-economic uncertainty, particularly in Europe.
Diageo Plc DGE.L rose 3.8% after UBS upgraded the stock to "buy" from "sell", saying its analysis showed positive signs for the spirit maker's U.S. business.
Swiss contract drugmaker Lonza LONN.S rose 6.1% following plans to exit its capsules and health ingredients business.
Reporting by Sruthi Shankar in Bengaluru; Editing by Janane Venkatraman and Vijay Kishore
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