* FTSEurofirst 300 falls 1.6 percent
* Investors had expected more ECB details on ABS plan
* Banks, oils sectors among top decliners
By Atul Prakash
LONDON, Oct 2 (Reuters) - European equities extended losses late on Thursday, with a benchmark index hitting a six-week low after the European Central Bank gave less details about its plan to buy secured debt than the market had expected.
ECB President Mario Draghi said the central bank would begin to buy covered bonds (CB), a form of secured debt, from banks in mid-October and purchase asset-backed securities (ABS) at some point in the fourth quarter of the year.
The planned moves are an attempt to kick start a languishing euro zone economy, despite misgivings in Germany and elsewhere, after cutting interest rates last month. The ECB left its main refinancing rate at 0.05 percent on Thursday.
“Investors had hoped for more than they got (from Draghi’s press conference). The fact is that the euro zone is in a liquidity trap in which additional monetary policy measures just aren’t working,” said Jeremy Batstone-Carr, head of private client research at Charles Stanley
“The banking sector has weakened notably as ABS/CB purchases are to be caveated, probably in a nod to Germany where opposition to the deterioration in the quality of the ECB balance sheet is well known.”
Banks featured among the worst decliners, with the euro zone banking index falling 3 percent to a one-month low. Societe Generale, Unicredit, Intesa Sanpaolo and Banco Popular fell more than 5 percent.
The European oil and gas index was also hit hard, down 3 percent, with investors nervous following a sharp decline in crude oil prices to a 27-month low on concerns of a supply glut.
By 1416 GMT, the FTSEurofirst 300 index of top European shares was down 1.6 percent at 1,346.25 points after falling as far as 1,345.41, the lowest since late August.
The pan-European index, which is still up about 3 percent this year, has fallen 3.6 percent over the past two weeks, dragged down by a flurry of sales and profit warnings as well as by growing concerns over the timing of the U.S. Federal Reserve’s expected interest rate hike next year.
Among other big movers, rig firm Seadrill fell 5.6 percent, the biggest decliner in the FTSEurofirst 300 index, tracking a drop in shares of its peers that have taken a beating on lower oil prices, cutbacks in capex and an abundance of new rigs on the market. Oil prices fell 2.3 percent to a more than two-year low on Thursday.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today’s European research round-up (Editing by Crispian Balmer)