European shares in sharpest drop for 4 months after new ECB measures fall flat
* FTSEurofirst 300 down 3.3 percent
* ECB cuts deposit rate in line with expectations
* Asset purchases extended but not increased
* Investors disappointed with limited new measures (Recasts, adds details, quotes)
By Alistair Smout
LONDON, Dec 3 (Reuters) - Top European shares saw their biggest fall in 4 months on Thursday, with a recent rally to 3-month highs sunk by a European Central Bank policy update which fell well short of high hopes for extreme dovishness.
A cut in deposit rate was only in-line with expectations, sending stocks into negative territory, and falls accelerated in afternoon trade after ECB President Mario Draghi's news conference.
While he announced that the ECB's asset purchase programme would be extended, he did not increase the size of the programme, and bets that there might be further easing were 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. Continuación...