By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks slid to a nearly 10-month
low Thursday, hit alongside other European markets, as investors
expressed dissatisfaction at the European Central Bank's efforts to
stave off low inflation and stagnating growth in the eurozone.
As economic conditions have worsened in the eurozone, the U.K.'s
largest export market, many investors have been looking for the
central bank to launch full-scale quantitative easing.
Instead, the central bank said it will leave key interest rates
unchanged, including holding its main lending rate at 0.05%. The
bank's program of purchasing asset-backed securities that will
start in the fourth quarter will last at least two years. Read live
blog of Draghi's conference.
The markets weren't heartened by the fact that ECB President
Mario Draghi didn't flesh out the potential size of a planned
asset-purchase program. He has previously indicated that he wants
to push up the ECB's balance sheet by about a trillion euros ($1.26
trillion)
Draghi's positive tone about the European economy also left the
impression to some that the central banker felt stronger action to
stimulate the eurozone was unwarranted. Read why investors are
disappointed with Draghi.
Markets: The benchmark FTSE 100 sank 1.7% to 6,446.39, its
lowest finish since December 2013, according to FactSet data. The
Stoxx Europe 600 tumbled 2.4%.
The "equity market is disappointed as it was expecting [a] less
upbeat Draghi today," said Naeem Aslam, chief market analyst at
AvaTrade, in emailed comments. "So, it is almost certain there will
be no full QE this year and chances are in favor of the eurozone
slipping back into recession."
Only three of the FTSE 100's constituents moved higher, led by a
0.4% gain for asset manager Hargreaves Lansdown PLC . The oil and
gas group suffered the sharpest losses sector-wise, as crude-oil
futures traded below $90 a barrel for the first time since April
2013.
Shares of TUI Travel PLC started off strongly Thursday after the
company said it now expects full-year underlying operating-profit
growth of at least 9%. It had previously anticipated growth of 7%
to 10%. But the stock was caught up in the broad market selloff,
ending down 0.7%.
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