European stocks dropped on Thursday, halting their two-week rally after the U.S. Federal Reserve sounded less dovish on policy as it ended its six-year bond-buying programme.

CMC Markets Market Analyst Michael Hewson says the Fed has a tricky path ahead in terms of when to implement its first hike.

SHOWS: LONDON, ENGLAND, UK (OCTOBER 30, 2014) (REUTERS - ACCESS ALL)

1. CMC MARKETS, MARKET ANALYST, MICHAEL HEWSON, SAYING:

JOURNALIST ASKING MICHAEL HEWSON: 'Michael, I just want to take us through some of the numbers that just come through in the last few minutes from the euro zone business sentiment and also business climate. Not doing too well, slightly better than expected but overall, not too well. How much weighting do you put on these numbers?'

HEWSON: 'Well, good morning, Angeline. Not much, I have to say. Confidence numbers tend to be fairly arbitrary. If you look at U.S. consumer confidence numbers, for example, they are at seven-year highs yet retail sales are lackluster, durable goods are lackluster. For me, it's all about the hard data. It is not what people are saying they're going to do, it is what they actually do. So yeah, those economic confidence numbers, there is a slight improvement. Does it really change my views overall on the euro zone economy? No, it doesn't. If you look at the unemployment data in Germany, that actually improved this morning. Yet, that is probably the only silver lining at the moment in the euro area in a sea of what is very disappointing data.'

JOURNALIST: 'And speaking of weak data, we have had some dismal data from Germany recently. What does this tell you about the euro zone? And I know you're in the camp where the ECB won't do QE. What can it do?'

HEWSON: 'I think the ECB is very much at the limits of what it can do without creating a political storm in Germany. And while German unemployment still remains very, very low, I don't think really Germany will feel constrained to really cut the rest of the euro area any slack. In my experience, Angeline, politicians in the euro area have a habit of overpromising and underdelivering. And you're certainly seeing that in the context of the wrangling that's going on with respect to the Italian and the French budget. So you've had two years to try and get some of their deficit spending under control since Mr. Draghi bought them all that time in 2012. And to be quite frank, they've wasted it.'

JOURNALIST: 'And just very quickly, the Fed on the other hand, striking a hawkish tone. When do you expect the first hike to come?'

HEWSON: 'Well, the Fed has said it's data-dependent and I think the Fed has got a very tricky line to navigate here. They've got to strike a balance between not being too hawkish while at the same time, being too dovish. Now, the markets are a little bit lower today on the back of the end of quantitative easing and I think what investors have got to get used to, I think - if I could compare them to a small child on a bicycle, that has just had its stabilizers taken off. Let's see how they react at the first obstacle or the first pot hole. At the moment, things don't look that promising. You may recall previous ending of QE, we saw drops in the stock market. I don't really see that this instance is probably going to be any different. It's going to be very volatile.'