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European shares drop after central bank policy was left unchanged
Major European bourses closed lower on Thursday after the European Central Bank kept interest rates unchanged and said current stimulus measures are sufficient and are likely to be used fully.
The pan-European STOXX 600 index fell 0.6 percent, with ECB President Christine Lagarde saying that the bank is carefully watching the repercussions of the euro’s strength. There are expectations, in light of the ebbing momentum of the economic recovery, that the central bank will pump a new stimulus at some point.
Jay Melhi, global market analyst at JPMorgan Asset Management, said, "The balanced tone at today's ECB meeting was less favorable to monetary easing than many investors had been expecting.
"The lack of policy change in the ECB is due more to the limited effectiveness of the options remaining at its disposal and not because the bank is comfortable with the current economic situation."
