European Stocks Decline as Investors Weigh ECB Impact
London (Sept 10) In the U.K., opinion polls have indicated that the result of a Sept. 18 referendum on... Read More
Lingering questions about whether the European Central Bank’s stimulus measures will kickstart the region’s stagnant economy outweighed prospects for peace in Ukraine, keeping investors in European stocks on the sidelines.
The benchmark Stoxx Europe 600 Index slipped 0.2 percent to 344.03 at 2:57 p.m. in London, after earlier falling as much as 0.6 percent. The gauge has declined 1.4 percent since reaching a two-month high on Sept. 4, when the ECB unexpectedly cut interest rates and announced a plan to buy securitized debt.
“Volatility on monetary policy is at risk of increasing,” Steen Jakobsen, chief investment officer at Saxo Bank A/S in Copenhagen, said in a phone interview.
ECB President Mario Draghi said last week the central bank will buy asset-backed securities and covered bonds, to funnel cash into an economy which stalled in the second quarter and where lending has been shrinking for more than two years.
National benchmark indexes declined in 16 of 18 Western European markets today. The U.K.’s FTSE 100 fell 0.2 percent, France’s CAC 40 dropped 0.3 percent, and Germany’s DAX retreated 0.4 percent. The VStoxx Index, a gauge of expected volatility in euro-area stocks based on options prices, rose for a third day.
Ukrainian President Petro Poroshenko said Russia has withdrawn more than two-thirds of its troops from his country as European Union governments met to consider imposing tougher sanctions on Moscow. The proposals include barring some Russian state-owned defense and energy companies from raising capital in the EU, according to a European official who spoke on the usual condition of anonymity.
Stocks earlier pared losses as Chinese Premier Li Keqiang Li said the world’s second-largest economy won’t have a hard-landing and that the government will ensure a medium to high growth rate. The country will deepen policy changes to promote business, attract foreign investment and protect intellectual property, he said.