ROME, Oct. 26 (Xinhua) — The European Central Bank (ECB) kept its three key rates unchanged on Thursday amid fears that the 20-nation eurozone could be headed for recession. European stock markets had mixed reactions to the news, with across-the-board drops of more than 1 percent immediately following the highly expected decision from the ECB and uneven recoveries after that.

The blue-chip index on Germany’s Frankfurt Stock Exchange was down more than 1.8 percent Thursday before closing the day 1.1 percent lower. In France, the main index closed trading down 0.6 percent, while the Italian Stock Exchange in Milan recovered to close 0.3 percent higher after losses earlier in the week.

For its part, the STOXX Europe 600 index of major European economies was down 0.5 percent for the day.

In the past 15 months, the ECB has raised its baseline interest rate ten times as it sought to curb the impacts of record-setting inflation. Inflation has come down to 4.3 percent in September from its all-time peak of 10.6 percent late last year, but it remains above the ECB’s formal target of 2 percent.

But the ECB took its foot off the gas amid worries about economic growth among the countries of the euro currency zone.

Both Germany and Italy — the first and third largest eurozone economies, respectively — are in danger of entering into technical recessions.

Germany’s economy shrunk by 0.6 percent in the second quarter of this year, while Italy’s economy contracted by 0.3 percent. Indications that growth in the July-to-September period was weak in both countries.

Germany, which accounts for around 30 percent of the eurozone’s economic activity, is expected to be the only country in the Group of Seven (G7) to shrink this year, according to projections from the International Monetary Fund.

The economy in France, the second largest economy in the eurozone, was stronger than those of Germany or Italy in the second quarter, growing a modest 0.5 percent compared to a year earlier.

Earlier this week, the Purchasing Managers’ Index, or PMI, for the eurozone was reported at 46.5, its lowest level in three years. The PMI is a survey of major supply chain managers in 19 industries to determine manufacturing trends, and a reading below 50 points usually portends an economic contraction.

In addition to the high energy prices and economic instability stemming from the crisis in Ukraine, European economies are being impacted by geopolitical tensions coming from the conflict in Israel and a slowdown in global trade that will impact major exporters, according to analysts.

On Thursday, the ECB decided to keep the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 4.5 percent, 4.75 percent, and 4 percent, respectively.