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GLOBAL MARKETS-Draghi helps halt European stock sell-off; oil slips
September 24, 2014 / 9:12 AM / 3 years ago

GLOBAL MARKETS-Draghi helps halt European stock sell-off; oil slips

* Slide in German Ifo business morale points to weak Q3
    * Brent crude below $97 a barrel on supply glut
    * Air strikes in Syria fuel demand for safe-haven assets

    By Blaise Robinson
    PARIS, Sept 24 (Reuters) - European stocks settled following
a sharp two-day slide as the European Central Bank renewed its
pledge to keep monetary policy loose for a long time, while
Brent crude slipped further on excess supply.
    Bank President Mario Draghi said on Wednesday that policy
would remain accommodative for as long as it takes to push
ultra-low inflation in the euro zone back up closer to 2
    But with a weak German sentiment survey also in the mix, 
his renewed commitment was not enough to spur share market gains
following this week's pull-back, and the leading FTSEurofirst
300 index edged down 0.05 percent in morning trade.
    "Draghi just reaffirmed what he has said recently. It's
positive, but won't be enough to really prevent stocks from
drifting lower," Saxo Bank trader Andrea Tueni said. 
    "Following the string of sluggish macro data from Europe and
China that we had this week, the stock market consolidation is
probably not over yet."
    Investors have been rattled by this week's
worse-than-expected economic data from euro zone countries,
including German and French business surveys. 
    Adding to concerns, data showed on Wednesday Germany's Ifo
business sentiment index dropped for a fifth straight month in
September to its lowest level since April 2013, dampening
expectations for a strong third-quarter rebound in Europe's
largest economy. 
    German bond yields inched lower following the
data, further underlining the prospect of additional easing
measures from the ECB.
    The recent soft patch of economic indicators, coupled with a
weak take-up of the ECB's new set of emergency loans last week,
has increased chances that the central bank will have to resort
to other measures to revive growth.
    "It provides a further signal of broad-based weakness in
economic activity and raises pressure on policymakers to address
this," said Lyn Graham-Taylor, a strategist at Rabobank.
    Brent crude fell for a third day on Wednesday, with futures
for November delivery down 12 cents at $96.73 a barrel,
slipping further below $97 as inflated supplies and weak
economic data from Europe outweighed rising political tensions
in the Middle East.
    London copper climbed away from three-month lows, although a
looming oversupply of the metal kept its advance in check.
    The dollar was kept in check on geopolitical concerns. The
United States and its Arab allies bombed militant groups in
Syria for the first time on Tuesday, opening a new front amid
shifting Middle East alliances and sapping demand for riskier
    The air strikes in Syria fuelled demand for safe-haven
government debt and pushed U.S. Treasury yields lower, in turn
halting the dollar's recent bull run.
    The yen rose after Japanese Prime Minister Shinzo Abe voiced
concern about the economic impact of the currency's fall to a
six-year low, adding to the sense of a pause this week in the
dollar's rise.
    "It seems to us - and I think most people - that it's not
the fact of the move, just the pace of it that Tokyo is
concerned about," said a spot dealer with one large
international bank in London.
    "(But) it is not a surprise that we're seeing the yen show
some resistance at the moment, given the slight pullback we've
seen on the dollar in the last few days."

 (Additional reporting by John Geddie in London, editing by John

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