European shares lose $526 billion in value in last 6 months
by Daily Sabah
ISTANBULSep 08, 2015 - 12:00 am GMT+3
by Daily Sabah
Sep 08, 2015 12:00 am
President of the European Central Bank (ECB) Mario Draghi's support program hasn't been as successful as expected. Six months after quantitative easing, 96 percent of the companies in the Euro Stoxx 50 Index depreciated in value in terms of profits. The ECB's plan to increase the liquidity of the financial system by bond purchasing was supposed to revive risk-taking like it did six years ago in the U.S. But the opposite occurred and the stocks lost $526 billion in value last month.
While investors were waiting for an increase in the markets, the quantitative easing has failed to develop trust in European stocks. On the other hand, stock markets from Shanghai to New York have recorded the worst sales since 2011. Draghi's plan actually caused Greece to be left out of the stock exchange instead of making Europe a safe haven. The Euro Stoxx 50 Index dropped by 9.2 percent in August with the expectation that the Chinese economy will pressurize global growth. After a week of decreasing, the index increased by 1.2 percent on Monday. European Shares Strategy Manager of Morgan Stanley in London Graham Secker said that people are afraid that there are no policy tools left to be used and therefore, the investors' trust is weak and everyone is trying to avoid risk.