Asian Stock Markets Fall Following ECB Failure to Communicate

Asian stocks joined a global markets selloff after the European Central Bank shocked investors by failing to deliver the dramatic stimulus moves they expected.

Japan’s Nikkei lost more than 2%, while China’s Shanghai Composite fell 1.7%. The ASX All Ordinaries closed down 1.4%, and all other Asian markets finished Friday in the red.
The dismal day in Asia followed a rough Thursday for investors around the world. Germany’s DAX and France’s CAC 40 fell 3.6%. Markets in Spain lost 2.4%.

In the U.S., the Dow dropped 252 points, and the S&P 500 fell 1.4%, its worst day since late September, while the Nasdaq lost 1.7%.

On Thursday, the ECB cut interest rates to try to boost Europe’s economy, but failed to take stronger stimulus measures, disappointing investors.

The ECB cut its deposit rate deeper into negative territory — effectively charging banks more for holding money with it — and said it would continue to buy government bonds and other assets until March 2017, six months longer than previously planned.

But it said those purchases would continue at a rate of 60 billion euros ($65 billion). Investors were surprised, as they had been expecting the ECB to announce an increase of at least 10 billion euros a month.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza