European stocks slip after ECB surprise

Europe's main stock markets dipped on Friday as investors digested the ECB's surprise deflation-fighting stimulus measures, and figures showed US unemployment dropped less than hoped, dealers said.
Investors were also anxiously tracking talks aimed at sealing a ceasefire in Ukraine, after almost five months of conflict.
By mid afternoon, London's benchmark FTSE 100 had fallen 0.48 percent to 6,845.22 points compared with Thursday's closing level.
Frankfurt's DAX 30 index gained 0.39 percent to 9,761.98 points but the Paris CAC 40 slid 0.05 percent to 4,492.59.
"Momentum has ground to a halt in the FTSE following the ECB’s statements yesterday, as traders have a distinct 'what now' mentality," said IG analyst Alastair McCaig.
- Eurozone economy stagnates: data -
The mood was also soured by official data confirming that the 18-nation eurozone economy stagnated in the second quarter with zero growth.
In foreign exchange activity, the European single currency recovered to $1.2974, down from $1.2945 late in New York on Thursday, when it had slumped to a 14-month low of $1.2920 after the ECB move.
The dollar meanwhile jumped to its highest level against the Japanese currency since the financial crisis, hitting 105.71 yen -- last seen in early October 2008 -- before pulling back to 104.91 yen.
"The euro has slightly rebounded -- however this has only regained a fraction of the losses seen yesterday where the currency dramatically tumbled off the back of an unexpected interest rate cut by the ECB," said Spreadex analyst Sam Fox.
The ECB cut its key interest rate to a record-low of 0.05 percent on Thursday, from 0.15 percent previously, and announced an asset-purchase plan in order to counter deflation pressures, boost lending and lift sluggish growth in the eurozone.
However, ECB President Mario Draghi stopped short of so-called quantitative easing (QE) -- but said the radical policy had been discussed.
The news pushed the euro down sharply and boosted European and US stocks on Thursday.
QE is a policy used by other central banks, such as the US Federal Reserve, of buying securities on a big scale to inject cash into the economy.
Concern is growing that the European economy, after making it through the euro sovereign debt crisis and the prospect of the collapse of the single currency, may now be poised for years of stagnation or unduly low growth.
"The measures have had the intended effect to push the euro lower," said CMC Markets analyst Michael Hewson.
"Without significant structural reform at the same time ... they merely defer the hard decisions and make the prospect of difficult discussions about full-blown QE that much more likely."
- Eyes on US data -
Adding to the dollar's strength is an expectation the Federal Reserve will bring forward an interest rate rise as the US economy picks up pace, while Bank of Japan chiefs consider further easing measures as they struggle with tepid growth.
On Friday the US Labor Department said unemployment had decreased by only 142,000 to 6.1 percent in August compared with the previous month.
Analysts had expected more than 200,000 new jobs, to maintain a six-month streak over that benchmark. This would have demonstrated consistent strength in the US economy.
Markets on Wall Street opened down. Five minutes into trading, the Dow Jones Industrial Average dropped 29.73 points (0.17 percent) to 17,039.85.
The broad-based S&P 500 dipped 2.82 (0.14 percent) to 1,994.83, while the tech-rich Nasdaq Composite Index lost 4.85 (0.11 percent) at 4,557.44.
In London currency deals, the single currency rose to 79.51 pence from 79.23 pence late on Thursday, while the pound dipped to $1.6315 from $1.6337.
The price of gold rose to $1,264 per ounce, down from $1,271.50 on Thursday on the London Bullion Market.