Milan stock exchange plunges after launch of ECB asset purchase

The Milan stock exchange fell almost 4 percent on Thursday after the European Central Bank (ECB) launched a new asset purchase plan and warned of the risks of modest growth and inflation in the eurozone.

According to ANSA news agency, markets were disappointed that the ECB did not release more details about the asset purchases following a governing council meeting in Italy's Naples.

Some analysts were also reportedly expecting information about possible quantitative easing which would involve larger asset purchases.

Speaking at a press conference in the southern city, ECB President Mario Draghi launched the purchase of covered bonds and asset-backed securities (ABS) to try to inject more liquidity into the eurozone's economy to stimulate growth.

The ECB head warned of the "modest" economic growth and persisting low inflation in the eurozone.

He said the governing council was "unanimous in its commitment to using additional unconventional instruments within its mandate" should low inflation become too prolonged. The ECB aims at maintaining inflation rates below, but close to, 2 percent.

Also in the hope of stimulating the economy, the ECB governing council agreed to leave the central bank's key interest rates unchanged at record lows. The main refinancing rate was kept at 0.05 percent and its deposit rate at minus 0.20 percent.