Markets Slide as ECB Chief Fails to Stop Eurozone Scare

Markets fell in Europe and the U.S. on Thursday after European Central Bank chief Mario Draghi failed to outline specific new measures to tackle Europe’s escalating sovereign debt crisis, disappointing investors.

The regulator “may undertake outright open market operations of a size adequate to reach its objective,” Draghi said, but stopped short of announcing any immediate action to ease Europe’s debt woes.

The European Central Bank had previously intervened with bond-buying in March, to drive down the borrowing costs of heavily-indebted eurozone countries.

“Over the coming weeks, we will design the appropriate modalities for such policy measures,” Draghi said.

Draghi pledged last week the ECB was ready to do “whatever it takes” within its mandate to preserve the euro.

The bank chief’s statement came after the European monetary regulator decided to keep a key interest rate at a record low 0.75 percent in.

Draghi’s statement today sent stocks and the euro downward.

In Europe, Germany’s DAX was down 1.94 percent at 6,623 while the CAC-40 in France fell 2.12 percent to 3,251 as of 1:42 p.m. GMT. The FTSE 100 index of leading British shares was down 0.85 percent at 5,664.

The euro was trading 0.2 percent lower at $1.2215

In Russia, the MICEX ruble-denominated index was down 1.31 percent to 1,393.40 and the RTS dollar-denominated index fell 1.67 percent to 1,351.98 points as of 5:47 p.m. Moscow time (1:47 p.m. GMT).

The ruble fell by 17 kopecks against the dollar to 32.50 but gained 12 kopecks against the single European currency to 39.69.

U.S. stocks began Thursday with a steep decline in response to Draghi’s statement.

The Dow Jones Industrial Average fell 86.05 points to 12,885.01. The SP 500 index declined 11.02 points to 1,364.30 and the Nasdaq Composite shed 16.24 points to 2,903.97.


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