European Stocks Decline as Draghi Sees Room to Tweak Stimulus

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Draghi Urges Persistence in Stimulus, Prudence Needed

European stocks tumbled as investors assessed Mario Draghi’s comments indicating he sees room for paring monetary stimulus without tightening policy.

The Stoxx Europe 600 Index retreated 0.8 percent at the close. Banks bucked the trend, following bond yields higher after comments by the European Central Bank President, while miners saw their best jump in a week. Shares of automakers were among the biggest losers, led by Schaeffler AG, which tumbled after cutting its 2017 profitability forecast.

  • Draghi also said the factors weighing on euro-area inflation are temporary. He “offered the first inclination that central bank stimulus could soon be wound in,” Jasper Lawler, a market analyst at London Capital Group, wrote in a note. “The notable switch in Draghi’s speech was using ‘transitory’ to describe global factors that have been pulling inflation lower.”
  • Tuesday’s losses are worsening the Stoxx 600’s biggest monthly drop since October.
  • William Hill Plc dragged leisure shares lower after Investec said further challenges remain for the U.K. bookmaking sector, downgrading the stock to sell.
  • Stada Arzneimittel AG fell 3 percent after investors in the company tendered too few shares to private equity firms Bain Capital and Cinven, quashing a takeover plan that had been secured after weeks of fierce competition. Since the offer failed, the buyout firms have been assessing the situation and holding exploratory talks with advisers, financing banks and shareholders about the feasibility of renewing their offer, people familiar with the matter said.
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