World stock markets churned lower Friday on lingering disappointment over "underwhelming" eurozone stimulus measures and ahead of key US jobs data.
Equities had plunged Thursday as the European Central Bank's latest stimulus plan disappointed investors, sparking a global sell off that spilled over into Wall Street and Asia.
In late Friday morning deals, London lost another 0.2 percent, Frankfurt fell 0.6 percent and Paris also slid 0.6 percent, one day after the key indices shed between two and four percent in value.
Speculation had swirled for weeks that the ECB would ramp up its bond-buying programme and loosen monetary policy to bolster growth and counter weak inflation.
Hopes were stoked Wednesday by news that eurozone inflation languished at 0.1 percent in November -- far lower than the ECB's official 2.0-percent target.
The bank on Thursday cut deposit rates further into negative territory -- meaning lenders must pay to park cash with it and so look to loan more -- and extended the length of its bond purchases.
- Huge let-down -
However, the long-awaited announcement was seen as a huge let-down as it crucially failed to increase the size of the stimulus while the rate cut was less than hoped for.
"Equity markets took a notable shake out yesterday in response to the underwhelming actions of the ECB," said TrustNet Direct analyst Tony Cross.
"The central bank’s stimulus measures fell some way short of expectations, initiating degree of panic across the board.
"This rattled US markets after the European close last night and is once again taking a toll in early trade as the week’s final session gets underway."
The news sent the euro surging on Thursday to a one-month peak at $1.0981, having earlier hit a 7.5-month low of $1.0524 in highly volatile deals.
"Draghi failed to deliver on investors' expectations," said ETX Capital analusty Daniel Sugarman.
"In November the ECB governor had stated that the ECB would ‘do what we must to raise inflation as quickly as possible’ -- which investors took to mean the unveiling of a significant surge in monetary stimulus in December."
The single currency had come under fierce selling pressure leading up to the announcement as dealers positioned themselves for more far-reaching measures.
- Fed caution -
The euro's gains were also given support after Federal Reserve boss Janet Yellen said the bank remained wary of a US interest rate rise because of concerns about a strong dollar and other central banks' loose monetary policies.
While the Fed is still widely expected to lift rates this month -- for the first time in nine years -- Yellen's comments caused traders to baulk after a recent run-up in the dollar.
Dealers are now awaiting the release of key US jobs data later in the day, although analysts say the report would need to be monstrously bad to prevent a Fed rate rise in December.
Asian stocks finished in the red, with Tokyo down 2.2 percent, Shanghai shedding 1.7 percent and Sydney 1.5 percent lower.
Oil prices rose Friday amid OPEC's policy meeting in Vienna, where the cartel appears on course to maintain crude production levels despite a recent plunge to underneath $40 per barrel.
- Key figures around 1130 GMT -
London - FTSE 100: DOWN 0.2 percent at 6,263 points
Frankfurt - DAX 30: DOWN 0.6 percent at 10,728
Paris - CAC 40: DOWN 0.6 percent at 4,702
EURO STOXX 50: DOWN 0.4 percent at 3,149
Tokyo - Nikkei 225: DOWN 2.2 percent at 19,504.48 (close)
New York - Dow: DOWN 1.4 percent at 17,477.67 (close)
Euro/dollar: DOWN to $1.0876 from $1.0947 in late US trade on Thursday
Dollar/yen: UP to 122.80 yen from 122.61 yen