European shares inch
lower as banks fall, energy boost fades
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[June 05, 2017]
By Danilo Masoni
MILAN
(Reuters) - European shares slipped on Monday as an early boost from
energy shares faded, and banks fell, led lower by Spain's Banco Popular
on concerns that it could be wound down.
The pan-European STOXX 600 index was down 0.15 percent by 0958 GMT (5:58
a.m. ET), with activity reduced by a public holiday in the region, while
Britain's FTSE, which hit a fresh record high on Friday, was also down,
by 0.3 percent.
An Islamist attack in London days before a national election on Thursday
had no major impact on broader equity markets, while geopolitical
tensions in the Middle East lifted energy stocks in early deals.
Crude oil prices rose 1 percent before paring gains after top exporter
Saudi Arabia and other Arab states cut ties with Qatar, accusing it of
supporting terrorism.
"The move is unlikely to have a material impact on the physical market
but the prospect that rising tensions could result in disruptions ...
makes the immediate price response a reasonable one," Exane said in a
note to clients.
"Longer term, any rising tensions ... are potentially negative for the
price; cuts are made easier by the fact that producers are willing to
work together," it added.
Shares in BP <BP.L> and Royal Dutch Shell <RDSa.L> rose slightly, while
Italy's Eni <ENI.MI> declined 0.3 percent and France's Total <TOTF.PA>
fell 0.2 percent.
Meanwhile shares in companies in which Qatar holds stakes were mixed.
Miner Glencore fell 1.5 percent as basic resources stocks led sectoral
fallers, while Shell rose and utility Iberdrola <IBE.MC>, Barclays bank
<BARC.L> and builder Vinci <SGEF.PA> were down just slightly.
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A trader looks at his screens on the Unicredit Bank trading floor in
downtown Milan June 13, 2013. REUTERS/Alessandro Garofalo
The
German and some other European stock markets were closed for a public holiday,
reducing overall activity.
Banks were the biggest drag to the STOXX index with Banco Popular falling as
much as 18 percent to fresh record lows on worries that it could be wound down
if it does not find a buyer.
Investors dismissed attempts by the company's chairman, Emilio Saracho, to
soothe nerves. In a letter sent on Friday, Saracho told his executives that the
bank was solvent and urged them to remain calm and confident.
A trader at an Italian bank said the recent price slide made any
recapitalization of Banco Popular hard to achieve, while there could also be
risks of contagion to other Spanish banks.
Banco Santander <SAN.MC> fell 1 percent.
Some travel stocks suffered after the attack in London on Saturday. Budget
airline Easyjet <EZJ.L> fell 1.9 percent, and Merlin <MERL.L>, which runs
attractions including London's Madame Tussaud's waxworks museum, fell 1.6
percent.
(Reporting by Danilo Masoni)
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