European stocks fell after the European Central Bank was said to study models for buying as much as 500 billion euros ($591 billion) of investment-grade assets.
The Stoxx 600 lost 0.5 percent to 340.82 at 11:18 a.m. in London. After rising as much as 0.1 percent, the measure extended losses as a person familiar with the matter said ECB staff on Jan. 7 presented policy makers with various quantitative-easing options, including buying only AAA-rated debt or bonds rated at least BBB-.
“This has the potential to have a negative impact as it is only 500 billion euros,” Soeren Steinert, who helps manage $24 billion as associate director for equities trading at Quoniam Asset Management GmbH in Frankfurt, said by phone. “Other higher numbers were rumored -- even trillions -- and Draghi talked about unlimited firepower. So these dramatic words built up expectations. I don’t think this is big enough.”
The Stoxx 600 is down 0.1 percent this week. It rallied the most
in three weeks yesterday, erasing losses for 2015, amid speculation weak inflation data this week bolster the case for the ECB to start sovereign-bond purchases at its Jan. 22 meeting. Data today showed German industrial production unexpectedly fell in November, while exports dropped more than estimated, signaling a slowing recovery.
The benchmark gauge has posted gains in January in three of the past four years, data compiled by Bloomberg show.
Santander Slump
Banks declined the most among 19 industry groups in the Stoxx 600, led by a 10 percent slump for Banco Santander SA. (SAN) Its board approved plans to cut its dividend and sell shares for as much as 7.5 billion euros ($8.8 billion). Shares of Spain’s largest bank rose 3.3 percent yesterday before being suspended by the Spanish regulator.Spain’s IBEX 35 Index lost 2.4 percent, the most among 18 western-European markets. Italy’s FTSE MIB Index slipped 1.2 percent for the second-worst performance.
Among other stocks moving on corporate news today, Tesco Plc slipped 2 percent. The U.K. grocer, which surged the most in more than 26 years yesterday after announcing measures from lower prices to store closures, was cut to below investment grade at Moody’s Investors Service. Sodexo fell 1.8 percent after saying first-quarter organic sales rose at a slower pace than analysts had projected.
United Internet AG climbed 4.1 percent after Goldman Sachs Group Inc. added shares of the German online-access provider to its conviction-buy list.
A report at 8:30 a.m. in Washington may show U.S. payrolls rose at a slower pace in December from a month earlier, while the unemployment rate declined, according to economists’ forecasts compiled by Bloomberg. Standard & Poor’s 500 Index futures lost 0.1 percent, after the underlying gauge jumped 3 percent in the past two days.
Investors are watching economic data to gauge the probability of a rate hike. The Federal Reserve has signaled it is unlikely to raise rates before April.
(An earlier version of this story corrected the direction of Santander’s stock move yesterday.)
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