Economics
Europe Stock Divergence Only Grows as Draghi Adds to Despair
- Gap between priciest, cheapest companies in Stoxx 600 widens
- Economic gloom, earnings and bank woes are all contributing
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Even before Thursday’s selloff in European equities -- among the worst this year -- there was evidence investors were growing more skeptical that Mario Draghi’s measures would lead to stronger corporate-profit results.
While the European Central Bank president had hinted that more stimulus was on the way, investors had increasingly sought the most expensive stocks in the hopes that stable earnings growers such as Spanish retailer Inditex SA would prove to be a haven. The result was the biggest gap in at least a decade between the shares of companies with the highest and lowest valuations.