European shares fall after ECB disappointment
* FTSEurofirst 300 down 1.8 percent
* ECB cuts deposit rate in line with expectations
* Asset purchases extended but not increased (Adds detail, quotes)
By Alistair Smout
LONDON, Dec 3 (Reuters) - European shares fell on Thursday, and were set for their biggest drop in over two months, after the European Central Bank's policy update was not as dovish as had been expected.
While the ECB decided to extend its asset purchase programme until March 2017, it did not increase its size, and a cut in deposit rate was in line with expectations, with hopes of further easing being dashed.
"A 10 (basis point) cut in the deposit rate initially disappointed markets set up to expect fireworks from the ECB, which was quickly followed by another damp squib of a mere extension of the current ECB QE program," said Alastair George, Chief Strategist at Edison Investment Research.
"We are not sure why, having promised so recently to be focused on the external risks to the Eurozone economy the ECB was willing to disappoint the markets in this way."
Following volatile trade around the decisions, the FTSEurofirst 300 was last down 1.8 percent at 1,485.55 points, its biggest fall since late September and over two percent down from session highs hit shortly before the initial policy announcement. Continuación...