By Carla Mozee, MarketWatch Euro climbs; ruble extends slide vs. dollar

LONDON (MarketWatch) -- European stocks turned sharply lower while the euro climbed Thursday, after European Central Bank chief Mario Draghi dashed hopes for a quantitative-easing launch this month by saying the bank won't consider it until early next year.

The Stoxx Europe 600 dropped 1.3% to 344.94. At a press conference, Draghi said the ECB's Governing Council is preparing for the possibility of easing measures in early 2015, but added that time frame doesn't necessarily mean around the bank's meeting in January. Read live blog of Draghi's press conference.

Ahead of Thursday's meeting, there was speculation Draghi would announce the launch of sovereign-bond purchases, or at least indicate it would consider introducing such action early in 2015. In recent weeks, a string of weak economic data has turned up the pressure on ECB policy makers to act to bolster inflation and encourage growth in the eurozone.

"Just 20 minutes into the press conference, Draghi has deflated the market," said Stephen Pope, managing partner at Spotlight Ideas, in a note. "What does it take for this bank to act with a sense of urgency[?] No wonder the eurozone will stay in decline during 2015, as neither politicians or central bankers are prepared to commence or carry on with the next round of heavy lifting."

Energy and mining stocks led losses on the Stoxx 600. Shares of Norwegian oil-services company Seadrill Ltd. put in the worst performance, falling 5.6%. Bank stocks struggled, with a 3.4% drop for Germany's Commerzbank SA and a 3.1% fall in Italy's UniCredit SA . Spain's Bankia SA lost 3.4%, while National Bank Greece SA gave up 3.4%.

The euro (EURUSD) jumped to $1.2444, compared with $1.2317 before the start of the event. The euro late Wednesday traded around $1.2311, at two-year lows.

The "short-covering bounce in the euro" came as the "sense of urgency that Draghi (and European Central Bank Vice President Vitor Constancio) had appeared to express in recent speeches did not seem to be reflected in the press conference," said currency analysts at Brown Brothers Harriman in a note.

Draghi said launching full-blown QE wouldn't require a unanimous decision from the ECB's policy makers, and BBH noted there was a "clear precedent for this" in other stimulus actions opposed by Germany.

The ECB president also rebuffed a suggestion QE might be illegal under EU laws covering the financing of member states' debt. "We are convinced that a QE program that could include sovereign bonds will fall within our mandate," he said. "Not to pursue our mandate would be illegal."

Holding to gains on Thursday, Ryanair Holdings PLC rallied 8.3% after the budget carrier raised its full-year profit forecast on strong figures from the November period. TUI Travel PLC shares climbed 3.6% as the vacation-packages company's fiscal 2014 underlying operating profit came in above its recently raised outlook.

The Stoxx 600 on Wednesday marked its highest close since early June, rising 0.6% to 349.34.

Germany's DAX 30 on Thursday fell 1.1%, France's CAC 40 index declined 1.4%, and the U.K.'s FTSE 100 moved 0.5% lower.

Also, Italy's FTSE MIB dropped 2.3%, and Greece's Athex Composite lost 1.6%. Spain's IBEX 35 slumped 2.3%.

Meanwhile, the Bank of Russia said Thursday the slide in the country's currency is posing a risk to financial stability, and announced another step aimed at curbing the ruble's decline. The ruble (USDRUB) gave up earlier gains, leaving the greenback to buy 54. 271 rubles, compared with 53.038 rubles on Wednesday.

The ruble has dropped roughly 40% against the dollar this year. Russian President Vladimir Putin in a speech to lawmakers and top officials Thursday said the ruble has been subject to "speculative attack" and called on officials to take action to discourage further weakening.

Russian stocks lost 1% to 1,590.65 on the MICEX index.

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