European Stocks Swirl Lower On ECB Disappointment

LONDON, (UrduPoint / Pakistan Point News -9th Sept,2016) - Europe's equities sagged Friday, a day after the European Central Bank failed to deliver new stimulus measures, while Asian markets were marred by concerns over North Korea's nuclear test.

Frankfurt stocks dropped 0.4 percent, Paris lost 0.5 percent and London was down 0.3 percent in value in afternoon deals. "It looks like the markets are in for a rather uninspired end to the week," concluded Spreadex analyst Connor Campbell.

The ECB opted against more stimulus Thursday, with president Mario Draghi calling for "patience" to see the effect of vast amounts of cash already injected into the system. "Markets continue to digest disappointment that ECB President Draghi did not offer more," said Mike van Dulken, head of research at Accendo Markets.

"This likely stems from a combination of his hands being tied for now -- things not markedly worse, but not better either -- and wanting to see what peers do (Bank of England, Bank of Japan, Federal Reserve) over the next couple of weeks." Policymakers made no changes to the ECB's ultra-loose monetary policy, keeping its so-called quantitative easing (QE) asset-buying policy steady at 80 billion Euros per month and holding eurozone interest rates at record lows.

"Investors were left disappointed as Mario Draghi didn't come up with the expected goods, failing to announce further monetary stimulus for the eurozone economy," added dealer Davide Ugolini at trading firm CurrenciesDirect.

"As widely expected, the European Central Bank left interest rates unchanged at record lows and left the door open for more cuts in the months ahead, as growth and inflation remain worryingly low.

"Leaving quantitative easing unchanged... proved controversial, and has divided opinions in the market. "Investors were even more puzzled when Draghi admitted the ECB didn't have any discussion as to an extension of the asset-purchase plan." London equities fell Friday despite official data showing that Britain's trade gap narrowed in July, as exporters were boosted by a post-Brexit slump in the pound.

In Asia, South Korean stocks and the won led most Asian markets lower Friday after the North conducted another nuclear test, while trading was also it by worries over global central bank easing.

Pyongyang said it had conducted a "successful" fifth nuclear test, which South Korea said was its largest-ever. The news intensified worries about geopolitical tensions in the region as world powers, including China struggle to rein in Pyongyang's erratic behaviour.

Seoul's KOSPI index fell almost 1.3 percent while a Bank of Korea decision not to cut interest rates was unable to prevent the won sinking almost one ercent early on, before it edged back slightly. The losses led a sell-off around most of the region with Sydney and Singapore each down 0.9 percent, while there were also sharp falls in Taipei, akarta and Manila.