Europe midday: Oil majors' and lenders shares pummeled despite ECB call to action
European stocks were trading on the back foot on Thursday afternoon even after the European Central Bank reiterated that it was open to increasing its emergency bond buying programme and amid conspicuous weakness in the oil patch.
Indeed, at her post policy meeting press conference, ECB chief, Christine Lagarde, expressly stated that the governing council was fully determined to do whatever was needed to meet its so-called symmetric inflation target, although at certain points she also appeared to try and strike a more balanced tone.
Even so, and as Claus Vistesen at Pantheon Macroeconomics put it: "The [ECB] president paints a picture of a central bank that is in full-on emergency mode, and which has had to throw out the rulebook for both policy and standard forecasting."
Against that backdrop, as of 1430 GMT the benchmark Stoxx 600 was trading 1.69% lower to 10,923.54, alongside a 1.73% drop on the Cac-40 to 4,590.93, while the FTSE Mibtel was down 2.1% at 17,688.40.
Italian bond yields were well-behaved followed Lagarde's presser, with the yield on the 10-year government note up three basis points to 1.80%.
Notably, oil and gas stocks were getting hammered, with the Stoxx 600's sector gauge falling 3.1% on the back of a 13% crash in shares of Royal Dutch Shell after the oil major cut its dividend payout for the first time since WWII and after its chief executive officer said that oil demand was unlikely to recover even over the medium-term.
His remarks were cast into stark relief by a further rally in US crude oil futures after America's Secretary of the Treasury said plans were being made to provide storage capacity for possibly hundreds of millions more barrels of oil.
Front month West Texas Intermediate was jumping 18.7% to $17.87 a barrel on the ICE alongside.
But it was lenders' shares that were weakest, with a sub-index for the group down by 3.86%.
Underscoring the dire economic situation within the single currency bloc, Eurostat reported a 3.8% drop in euro area GDP in quarterly annualised terms over the first three months of 2020.
Within that, Spain saw GDP cave in by 5.2% and France by 5.8%, with analysts at Pantheon Macroeconomics estimating a 2% drop in German GDP.