Equities sell off and bond yields spike as ECB fails to fire bazooka

European equity markets are selling off alongside the euro this afternoon as investors react badly to ECB president Mario Draghi's announcement on new policy measures designed to save the euro.

In comments that came after the ECB held interest rates at 0.75%, Draghi said the ECB will look to devise "appropriate modalities" for the purchase of sovereign bonds in the secondary market. He also urged investors not to short the euro, saying the currency's certain survival made the strategy 'pointless', but his comments fell on deaf ears as investors sold the single currency to push it below $1.22. Peripheral bond yields also spiked and the FTSE 100 reversed earlier gains to stand down 0.7% at 5,671 as divisions within the ECB's governing council became clear. Draghi said votin...