Euro climbs, stocks ease as ECB holds fire

London (AFP) - The euro rose Thursday and stock markets dropped as the European Central Bank kept its economic stimulus powder dry and held key rates steady.

ECB President Mario Draghi pleaded for "patience" while unprecedented amounts of cash already injected into the financial system worked their magic, before trying anything new.

But patience, it turned out, was not the order of the day in eurozone equity markets, with a disappointed Frankfurt market closing 0.7 percent lower at 10,675.29, after testing 10,600, and Paris ending down 0.3 percent.

"All things considered, today was not the event it was built up to be," said Craig Erlam, market analyst at Oanda.

Wall Street joined the European trend, with the Dow Jones index also sliding in early New York business.

Investors never expected any immediate steps from the ECB Thursday, said Andrea Tueni, an analyst at Saxo Banque in Paris, "but neither did we get anything reassuring about future action".

The euro, meanwhile, rose after ECB economists said they now expect 1.7 percent growth this year, up from the 1.6 percent they forecast in June.

Outside the eurozone, London outperformed its continental peers, closing 0.2 percent higher after receiving a boost from merger and acquisition news in Britain's fast-consolidating tech sector, in the wake of SoftBank's blockbuster purchase of iPhone chip designer ARM Holdings earlier this year.

British software group Micro Focus saw its share price leap by double digits after it agreed to merge with some of Hewlett Packard Enterprise's software assets.

The deal creates an entity worth $8.8 billion (7.8 billion euros) that will be "one of the world's largest pure-play enterprise software companies," the pair said in a statement.

- Draghi: 'Be patient' -

But investors were mostly interested in the ECB where traders had expected Draghi to lay the groundwork for policy shifts later in the year, especially if Brexit economic pain worsens demonstrably.

But for the moment, Draghi said the changes to the outlook are not "so substantial to warrant a decision to act. Our monetary policy is effective".

While Draghi stated the ECB stands ready to take further stimulus measures if needed, he also pleaded for restraint to give the bank's unprecedented stimulus measures a chance to work.

"Ultimately we've got to be patient," Draghi said.

Oanda's Erlam said he suspected Draghi's team may also need time to revamp the ECB's entire quantitative easing programme as the supply of bonds it can still buy runs dry.

"That would explain why they did not announce an extension to the QE program beyond March 2017 today because they must first decide how the program will be adapted," he said.

Elsewhere, Asian stocks mostly rose Thursday, extending a recent run of gains while Hong Kong and Shanghai were boosted by data showing Chinese imports rose in August for the first time in almost two years.

China's customs department said August imports rose 1.5 percent year-on-year, the first increase in 22 months, while exports fell less than expected thanks to weakness in the country's yuan currency.

Tokyo closed down 0.3 percent but the standout performer was Nintendo, which soared on news it had developed an exclusive Super Mario game for Apple.

- Key figures around 1545 GMT -

London - FTSE 100: UP 0.2 percent at 6,858.70 (close)

Frankfurt - DAX 30: DOWN 0.7 percent at 10,675.29 (close)

Paris - CAC 40: DOWN 0.3 percent at 4,542.20 (close)

EURO STOXX 50: DOWN 0.3 percent at 3,084.04

New York - DOW: DOWN 0.2 percent at 18,497.13

Tokyo - Nikkei 225: DOWN 0.3 percent at 16,958.77 (close)

Shanghai - Composite: UP 0.1 percent at 3,095.95 (close)

Hong Kong - Hang Seng: UP 0.8 percent at 23,919.34 (close)

Pound/dollar: DOWN at $1.3303 from $1.3340

Euro/dollar: UP at $1.1267 from $1.1242 late Wednesday

Dollar/yen: UP at 102.13 yen from 101.73 yen