European markets fall amid flurry of monetary policy updates; Defense stocks fall; Thyssenkrupp down 6.5%

European markets fell on Thursday, as global economic uncertainty cast a shadow over monetary policy announcements from the Bank of England, Swiss National Bank and Sweden’s Riksbank.

After a muted start, the regional Stoxx 600 was 0.5% lower by 2 p.m. U.K. time. The Stoxx 600 has closed higher for the last four sessions, rebounding from last week’s 1.22% loss.

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Germany’s DAX snapped a winning run on Wednesday and shed another 1.3% Thursday, while the Stoxx Aerospace and Defense Index was down 2.3% after five consecutive weeks of significant gains.

Lindsay James, investment strategist at Quilter Investors, told CNBC’s “Squawk Box Europe” on Wednesday that there could be a period of “buy the rumor, sell the fact” in European stocks after German lawmakers on Tuesday voted to allow exemptions to the country’s longstanding debt rules, unlocking hundreds of billions in defense, infrastructure and climate spending.

The potential for the reform had driven strong gains in German industrial, manufacturing and defense names earlier this month.

Shares of German engineering and defense group Thyssenkrupp lost early gains to trade 6.8% lower by early afternoon.

In the U.K., the Bank of England held its key interest rate at 4.5% on Thursday, with the central bank warning of global trade uncertainty arising from new U.S. tariffs. The British pound was 0.3% lower against the dollar by 2 p.m. U.K. time.

The Swiss franc was lower against the U.S. dollar after the SNB cut its key interest rate by a quarter percentage point to 0.25%. Swiss annual inflation fell to an almost four-year low of 0.3% in February.

The Riksbank meanwhile opted to hold its policy rate at 2.25%, forecasting inflation would come in between 2% and 3% this year before declining and stabilizing near-target.

Thursday’s flurry of European central bank activity comes after the U.S. Federal Reserve on Wednesday held its key rate, while indicating two quarter-percentage-point cuts are likely later this year despite the uncertainty presented by U.S. President Donald Trump’s trade policy.

Trump’s volatile tariff announcements and threats will also be considered by global central banks for their potential impact on global growth, inflation and currency markets. The Bank of England is widely expected to hold rates at its March meeting despite weak economic growth.

Shares of Hapag-Lloyd were down 8.3% after the shipping firm said it expected lower net income in 2025 amid geopolitical challenges.