The benchmark stock gauge of UK, the FTSE 100 Index extended a 6-week low as the UK stocks declined on today. The President of the European Central Bank cooled speculation of any further stimulus measurements and it affected UK stocks adversely. The FTSE 100 went down by 1.3% and the same is currently at 6,336.11. On today, both the Bank of England and the European Central Bank left the respective benchmark interest rates unchanged at the record low levels. When it comes to the broader FTSE All Share Index, the same went down by 1.2% on today. On the other hand, the benchmark stock gauge of Ireland, ISEQ Index experienced a retreat of 1.3%.
According to the Equity Strategist of BTIG Ltd., Nick Xanders, there were expectations that Draghi will be dovish. Draghi still intends to do whatever it takes to make the situation better, but, as it seems, he is not seeing the correct action which should be taken at this point of time. Xanders added that the market is disappointed because of that. Apart from that, bond yields are spiking as well, something not too good for the equities.
As mentioned by Draghi, the combined economy of the Euro region will return to growth by end of the current year and hence, there should not be any need of additional stimulus measurements to be taken by the policy makers. This comment adversely affected not only UK, but other European countries such as France and Germany as well. The French and German bonds went down, apart from that, the yields on the benchmark securities of both the countries went higher as well.
Draghi commented that in the meeting of the central bank, a lot was talked on the various nonstandard measures that can be utilized for repairing the transmission policy. Draghi doesn’t see a reason to act on all of the fonts and some of those should be kept on the shelf.
Among companies, Barclays went down by 4.1% as each share is now at 303.3 Pence, marking the biggest decline of the same in the FTSE 100. HSBC Holdings Plc., on the other hand, went down by 1.8% as each share is now at 700 Pence. Standard Chartered Plc. experienced a decline of 3.3% as well, taking each share to 1,448 Pence. Royal Bank of Scotland Group declined by 3.5% too.