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Mario Draghi, President of the European Central Bank (ECB), addresses the media during his monthly news conference at the ECB headquarters in Frankfurt, July 5, 2012. The European Central Bank cut interest rates by 25 basis points to 0.75 (ALEX DOMANSKI/REUTERS)
Mario Draghi, President of the European Central Bank (ECB), addresses the media during his monthly news conference at the ECB headquarters in Frankfurt, July 5, 2012. The European Central Bank cut interest rates by 25 basis points to 0.75 (ALEX DOMANSKI/REUTERS)

At the open: TSX falls on grim European growth data Add to ...

The Toronto stock market is down despite moves by central banks to give the global economic recovery some much needed assistance.

The European Central Bank and the People’s Bank of China both cut interest rates and the Bank of England pumped more money into the economy Thursday.

But early enthusiasm faded as ECB president Mario Draghi warned of early signs that the second quarter showed slower growth for Europe.

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The S&P/TSX composite index fell 51.33 points to 11,862.54 while the Canadian dollar was up 0.01 of a cent to 98.71 cents (U.S.).

U.S. markets were also weak amid poor showings last month by big retailers including Costco and Target.

The Dow Jones industrial average fell 73.04 points to 12,870.78, the Nasdaq composite index shed 8.17 points to 2,967.91 while the S&P 500 index gave back 4.57 points to 1,369.45. Oil moved down 43 cents to $87.23 (U.S.) a barrel.

“Markets are now looking to the U.S. Fed to take more action... after Monday’s disappointing manufacturing data and as the IMF chief talked up the need for more Federal Reserve support,” said analysts at the Hightower Report.

Copper dipped on Thursday on a stronger dollar, retreating from gains after the Chinese and ECB rate cuts.

The Chinese rate cut came earlier than expected, said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas in London.

“By doing the rate cut first over further reduction in reserve requirements by commercial banks signals a more aggressive stance to defend economic growth which has shown clear signs of slowing down in Q1.”

The ECB cut its main refinancing rates by a quarter percentage point, as forecast, to 0.75 percent following a dire batch of economic data showing even euro zone powerhouse Germany is entering a modest downturn.

Copper has rebounded about 4 per cent since last Thursday, lifted by a European agreement on a surprise euro zone rescue deal and expectations that weak economic data would lead to fresh stimulus measures by global central banks.

Some investors may have been disappointed at a lack of further stimulus measures by the ECB.

“Today’s ECB interest rate cut does little to alter the bleak economic outlook and the bank is unlikely to announce any bolder unconventional measures for now,” said Jennifer McKeown, senior European economist at Capital Economics.

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