U.K. stocks drop after ECB disappointment
LONDON (MarketWatch) -- Financial firms and miners steered U.K. stocks into losses on Thursday, as disappointment with European Central Bank President Mario Draghi prompted heavy selling in European equities.
The FTSE 100 (UKX) closed 0.9% lower at 5,662.30.
The London index tracked European markets lower as ECB President Draghi failed to meet investor expectations at his monthly news conference in Frankfurt.
Draghi said last week that he was committed to take any steps necessary within the bank's mandate to preserve the euro, but didn't outline new measures to curb the region's debt crisis at the conference. Read: Draghi doesn't back up the talk
Miners, which traditionally are considered risky equities, weighed on the London index. Heavyweight
Most banks were also heading south.
Insurance firm
U.K. stocks traded most of the early session in positive territory, after a report from German newspaper Sueddeutsche Zeitung claimed the ECB would coordinate with the euro-zone permanent rescue fund, the European Stability Mechanism, to buy Spanish and Italian bonds. Citing unnamed sources, the report said a final decision wouldn't be made until September. ECB weighing two-pronged bond-buy plan: report
The Bank of England announced that it would maintain the key lending rate at 0.5%. Bank of England holds fire; all eyes on ECB
Chris Williamson, chief economist for Markit, said in a note that after voting to add a further £50 billion to its quantitative-easing program at its July meeting, the Bank of England's decision was no surprise.
"The ingredient that is clearly missing from the U.K.'s recovery is confidence among businesses and households that things will get better," said Williamson. "Uncertainty prevails because the financial crisis rolls on in the form of the dark clouds hanging over the euro zone, but low confidence is also exacerbated by the worries that central banks are running out of ammunition."
Asset management firm
, 
, 
, Copyright ©2013. All rights reserved.