European stocks declined, reversing earlier gains, as the European Central Bank refrained from announcing additional stimulus measures immediately even as it held its benchmark interest rate.

The Stoxx 600 dropped 1.2 percent to 291.69 at the close of trading in London, after earlier gaining as much as 0.4 percent. The benchmark gauge has still rallied 4.3 percent so far this year as central banks around the world continued their stimulus measures.

National benchmark indexes fell in all but one of the 17 western European markets open today as Stockholm closed for Sweden's National Day.

FTSE 100 6,336.11 -83.20 -1.30% CAC 40 3,814.28 -38.16 -0.99% DAX 8,098.81 -97.37 -1.19%

ECB President Mario Draghi said policy makers today discussed additional stimulus policies and stands ready to act if needed.

"We had an ample discussion of the various measures, non-standard measures that could be utilized to repair the transmission policy," Draghi told reporters in Frankfurt after the policy meeting today. "We see no reason to act on all these fronts. These are measures we keep on the shelf."

At its meeting earlier, the ECB kept its benchmark interest rate unchanged at a record low of 0.5 percent at its meeting today. Economists had predicted no rate change. The ECB also kept its deposit facility rate at zero percent.

In the U.K., the Bank of England retained its asset-purchase target at 375 billion pounds ($580 billion) and its benchmark interest rate at 0.5 percent, in line with economists' predictions. It was the central bank's last policy meeting with Mervyn King as governor.

German factory orders fell more than economists predicted in April, data showed today. Orders, adjusted for seasonal swings and inflation, decreased 2.3 percent from March, when they increased a revised 2.3 percent, the Economy Ministry in Berlin said. Economists forecast a 1 percent drop.

Barclays fell 4.1 percent to 303.3 pence, its lowest price since May 3. Sumitomo Mitsui sold a 0.66 percent stake in the British lender at 308.5 pence a share for a total value of 261 million pounds. The sale cut Sumitomo's stake to 0.66 percent.

Fiat SpA lost 6.5 percent to 5.92 euros. Trading in the stock was briefly halted in Milan. Chrysler, which is majority owned by Fiat, is recalling as many as 254,396 Jeep Compass and Patriot vehicles due to an airbag-deployment defect, the National Highway Traffic Safety Administration announced. The carmaker is also recalling 180,131 Jeep Wrangler vehicles with a possible steering fault, the U.S. regulator said on its website.

France Telecom advanced 0.5 percent to 7.50 euros. Orange secured a five-year deal with Heineken to provide a communication network for the brewer's employees in 53 countries, according to a joint statement today. The companies didn't disclose the value of the deal.

Johnson Matthey jumped 6.3 percent to 2,750 pence, its highest price since at least 1989, according to data compiled by Bloomberg. The U.K. platinum refiner and producer of auto-catalysts posted underlying pretax profit that slipped to 389.2 million pounds in the full-year ending in March, still beating the 379.1 million-pound average estimate.

RSA Insurance Group Plc (RSA), which insures cars, homes and ships in the U.K., Scandinavia and emerging markets, rose 0.8 percent to 114.1 pence. Morgan Stanley raised its rating on the stock to overweight, the equivalent of a buy recommendation, from underweight.