European equities tumbled the most since the August selloff as the additional stimulus measures unveiled by the region’s central bank underwhelmed investors.

The Stoxx Europe 600 Index lost 3.1 percent at the close of trading in London, reversing a gain of 0.9 percent. The European Central Bank lowered its deposit rate, and President Mario Draghi said it will extend its quantitative-easing program until at least March 2017, including debt issued by regional and local governments. It didn’t, however, expand its monthly asset purchases.

Heading into today’s meeting, investors had high expectations. The Stoxx 600 climbed 13 percent from its low in September through yesterday, including its best two-day rally since July after Draghi signaled in October that the central bank would consider additional measures. On Monday, the gauge closed at a three-month high, taking its valuation to 16.5 times estimated earnings — closer to the multiple of 17.6 for the Standard & Poor’s 500 Index.

Traders were so confident that they saw little need to hedge: The number of Euro Stoxx 50 Index options changing hands last month was the lowest since July 2014. Contracts betting on further gains were the most owned.

After leading gains earlier on Thursday, carmakers were some of the biggest losers as the euro erased losses. Out of 600 companies in Europe’s stock gauge, 560 fell, with commodity producers slumping the most. Trading of Stoxx 600 companies was 36 percent greater than the 30-day average.

The central bank revised its inflation outlook, cutting it to 1 percent for 2016 and 1.6 percent for 2017, from 1.1 percent and 1.7 percent, respectively. It kept its prediction for next year’s economic growth at 1.7 percent and increased it to 1.9 percent for 2017, from 1.8 percent.

UBS Group AG said it kept its overweight rating on European stocks after today’s central-bank decision.

Source: Bloomberg