EUROPE MARKETS: European Stocks Flop As ECB's Draghi Talks Stimulus

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- Stocks across Europe dropped Thursday, mired in the red as European Central Bank President Mario Draghi's efforts to invigorate the struggling eurozone economy fell flat on Thursday.

The ECB said it will hold its main lending rate at 0.05%, and the interest rate paid on deposits left overnight at the ECB was maintained at -0.2%. The rate on the ECB's marginal lending facility also was kept at 0.3%.

Stimulus: Draghi, at his monthly news conference, said the bank's program of purchasing asset-backed purchases, starting in the fourth quarter, will last at least two years. He also said targeted long-term refinancing operations, or TLTROs, will have a "sizable" impact on the ECB's balance sheet. Read live blog of Draghi's conference.

A raft of recent data have highlighted worsening economic conditions in the region, including Wednesday's report showing manufacturing-sector activity in Germany -- Europe's biggest economy -- hit a 15-month low.

Markets: The Stoxx Europe 600 hit intraday lows as Draghi spoke, and was down 1.2% at 336.19 in broad-based losses.

The market has a "disdain for any policy's effectiveness apart from a [quantitative easing] program and thus today's subsequent sell-off is not surprising," said Joshua Mahony, research analyst at Alpari UK, in a note. "Until there are any signs that these programs work, markets are unlikely to be overwhelmed by their implementation."

The European oil and gas group stumbled 1%. The move came as crude-oil futures slid below $90 a barrel for the first time since April 2013 after Saudi Arabia said it will cut the selling price of its oil.

The euro (EURUSD) briefly hit an intraday high at $1.2693 after Draghi said skepticism about the sustainability of the share currency in Germany as well as in countries undergoing strict austerity is understandable, but that the shared currency isn't going away.

"I would only repeat that the euro is irreversible," he said. The euro later traded at $1.2630 compared with $1.2618 late Wednesday.

Germany's DAX 30 fell 0.9% and France's CAC 40 lost 2%. The U.K.'s FTSE 100 gave up 0.7%.

Among individual stocks, Bayer AG said it sold $7 billion worth of bonds in an effort to finance its purchase of Merck & Co.'s (MRK) over-the-counter medicine business. Shares of Bayer were down 1.2%.

In Frankfurt, Rocket Internet AG shares made their trading debut. They were at 39 euros ($49.46) in afternoon action, down from their issue price of EUR42.50.

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