LONDON MARKETS: U.K. Stocks Stumble As ECB Stimulus Outline Disappoints

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- U.K. stocks slid to a nearly 10-month low Thursday, hit alongside other European markets, as investors expressed dissatisfaction at the European Central Bank's efforts to stave off low inflation and stagnating growth in the eurozone.

As economic conditions have worsened in the eurozone, the U.K.'s largest export market, many investors have been looking for the central bank to launch full-scale quantitative easing.

Instead, the central bank said it will leave key interest rates unchanged, including holding its main lending rate at 0.05%. The bank's program of purchasing asset-backed securities that will start in the fourth quarter will last at least two years. Read live blog of Draghi's conference.

The markets weren't heartened by the fact that ECB President Mario Draghi didn't flesh out the potential size of a planned asset-purchase program. He has previously indicated that he wants to push up the ECB's balance sheet by about a trillion euros ($1.26 trillion)

Draghi's positive tone about the European economy also left the impression to some that the central banker felt stronger action to stimulate the eurozone was unwarranted. Read why investors are disappointed with Draghi.

Markets: The benchmark FTSE 100 sank 1.7% to 6,446.39, its lowest finish since December 2013, according to FactSet data. The Stoxx Europe 600 tumbled 2.4%.

The "equity market is disappointed as it was expecting [a] less upbeat Draghi today," said Naeem Aslam, chief market analyst at AvaTrade, in emailed comments. "So, it is almost certain there will be no full QE this year and chances are in favor of the eurozone slipping back into recession."

Only three of the FTSE 100's constituents moved higher, led by a 0.4% gain for asset manager Hargreaves Lansdown PLC . The oil and gas group suffered the sharpest losses sector-wise, as crude-oil futures traded below $90 a barrel for the first time since April 2013.

Shares of TUI Travel PLC started off strongly Thursday after the company said it now expects full-year underlying operating-profit growth of at least 9%. It had previously anticipated growth of 7% to 10%. But the stock was caught up in the broad market selloff, ending down 0.7%.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires