You are here
Europe: Stocks fall further on ECB letdown
[LONDON] Europe's main stock markets sank further in Friday opening deals on lingering disappointment over "underwhelming" eurozone stimulus measures, dealers said.
London's FTSE 100 index shed 0.4 per cent to 6,247.51 points in initial trade.
Frankfurt's DAX 30 slid 0.2 per cent to 10,770.16 points and the Paris CAC 40 lost 0.3 per cent to stand at 4,715.69 compared with Thursday's closing level.
The region's equities had plunged on Thursday as the European Central Bank's latest stimulus plan disappointed investors, sparking a global selloff that spilled over into Wall Street and Asia.
Speculation has swirled for weeks that the ECB would ramp up its bond-buying programme and further loosen monetary policy to inject some vim into a eurozone beset by years of tepid growth and stagnant inflation.
Stimulus hopes were stoked again on Wednesday by news that eurozone inflation languished at 0.1 per cent in November - far lower than the ECB's official 2.0-per cent target.
The bank on Thursday cut deposit rates further into negative territory - meaning lenders must pay to park cash with it and so look to loan more - and extended the length of its bond purchases.
However, the long-awaited announcement was seen as a huge letdown as it crucially failed to increase the size of the stimulus while the rate cut was less than hoped for.
"Equity markets took a notable shake out yesterday in response to the underwhelming actions of the ECB," said TrustNet Direct analyst Tony Cross.
"The Central Bank's stimulus measures fell some way short of expectations, initiating degree of panic across the board.
"This rattled US markets after the European close last night and is once again taking a toll in early trade as the week's final session gets underway."