August 22, 2019 / 3:21 PM / a month ago

Euro-zone stocks fall after report Bundesbank sees no need for fiscal stimulus now

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 22, 2019. REUTERS/Staff

LONDON (Reuters) - Euro-zone equities swung into negative territory on Thursday afternoon after Bloomberg reported the Bundesbank ruled out fiscal stimulus measures right now, dealing a blow to hopes that Europe’s top economy would consider boosting spending.

At 1453 GMT, the euro-zone benchmark .STOXXE and Germany's blue-chip DAX index .GDAXI were down 0.7%, hitting a day low and reversing earlier gains.

The report citing two people familiar with the Bundesbank’s stance said Germany’s central bank doesn’t see a need for fiscal stimulus at this time, even though it expects the economy to shrink again this quarter.

Earlier this month, Reuters reported Germany was considering ditching its long-cherished balanced budget policy to help finance a costly climate protection program with new debt, a move that boosted euro-zone stocks.

Reporting by Josephine Mason; Editing by Thyagaraju Adinarayan

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