London Stocks End Lower; Investors Shed Hopes
FTSE 100 ends down 1.1% at 5450.65, as investors shed hopes that there will be some resolution to the euro-zone crisis when this week’s EU summit concludes. Spain’s and Italy’s government bond yields are creeping higher again, which also reflects investors’ concerns. “In this febrile atmosphere, there is little that seems capable of lifting markets from their gloom,” says IG Index. Shire slides 11% after the FDA approves a generic version of its hyperactivity drug Adderall. On Tuesday, UK public sector net borrowing data are released at 0830 GMT. Events out of the euro zone will likely me of most concern to investors.
Frankfurt Stocks Close Sharply Lower
DAX closes 2.1% lower at 6132.39 amid fears that the EU summit later this week will fail to curb the euro-zone sovereign-debt crisis. “Market sentiment is really bad,” a trader says, adding that risk-aversion rules the market. Cyclical and banking stocks are the major losers Monday. Deutsche Bank finishes the session 4.1% lower, in line with very weak banking stocks throughout Europe. HeidelbergCement ends down 4.2%, while ThyssenKrupp closes 3.8% lower after JPMorgan cuts its target price. Tuesday’s major macroeconomic data releases include US Redbook retail sales data at 1255 GMT and June consumer confidence index at 1400 GMT.
Paris Stocks End Sharply Lower
CAC-40 ends 2.2% lower at 3021.64 as investors are cautious ahead of the EU summit to be held at the end of the week, says a Paris-based trader. Financial stocks weigh on the blue-chip index, with Societe Generale -5.9%, BNP Paribas -5.5% and Credit Agricole -4.7%. European Aeronautic Defence & Space Co. bucks the downward trend, closing 2% higher, benefiting from the dollar rising against the euro.
Zurich Stocks Closes Slightly Lower
SMI closes 0.8% lower at 5944.48 as banking and cyclical stocks decline amid continued uncertainty over the European sovereign-debt situation. UBS is the biggest faller, down 3%, and Credit Suisse falls 2.7% as both companies feel the continued effect of last week’s ratings downgrade. ABB also declines, down 2.8% after it is downgraded to underweight, while Swiss Life and Zurich lose ground as yields on Spanish and Italian bonds rise. With focus on this week’s latest EU summit, a trader expects the market to trade in the 5850 to 5950 range.
Amsterdam Stocks Close Firmly Lower
AEX ends 1.5% lower at 294.28 amid ongoing concerns about the debt crisis in the euro zone. Investors have little hope that the European Union summit this week will produce tangible results to quell the crisis, a trader says. Financial stocks are among the biggest losers, with ING shedding 6% and Aegon off 4.3%. Bucking the trend is KPN, up 1.1%, recouping some of last week’s losses
Nordic Stocks Close Sharply Lower
Nordic markets end sharply lower, as risk sentiment drops amid dampened optimism about the outcome of the EU summit later this week. OMXN40 ends 2.6% lower at 909.48 and Oslo’s OBX finishes down 1.0% at 351.24. In individual stocks, Nokia drops 11.4% after a slew of bad news last week, chiefly the announcement that Microsoft’s upgraded smartphone operating system won’t work on Nokia’s current Lumia devices. Commodity-related stocks also underperform, with SSAB ending off 6% and Lundin Mining down 6.6%.
Milan Stocks End Much Lower as Banks Tumble
FTSE Mib ends 4% lower at 13,113.7 on concern that this week’s EU summit won’t result in measures considered sufficient to resolving the euro-zone crisis, says a trader. Banks are among the biggest decliners, with UniCredit down 8.4% and Intesa Sanpaolo off 6.5%.
Madrid Stocks End Sharply Lower on Bank Fears
IBEX-35 plunges 3.7% to close at 6624 amid a broad global selloff Monday, as investors brace for a possible downgrade of Spanish banks by Moody’s. IG Markets’ Daniel Pingarron says losses in Asian markets and speculation on the downgrade, which could reduce most ratings in Spain’s banking sector to junk status, set a negative tone from the start of the session. Telefonica closes down 4.6%, Santander off 4.7% and BBVA tumbles 5.5%. Inditex is the lone gainer among Spanish blue chips with a 0.4% rise. Investors will continue to closely monitor news and developments surrounding the upcoming EU summit later this week
Athens Stocks End Sharply Lower
ASE ends down 6.8% at 566.79, led lower by bank shares. Yet again, traders are focusing on Spain after newspaper Expansion reports that Moody’s Investors Service plans to announce a massive downgrade of Spanish banks ratings later Monday. Alpha Bank falls 18.4% and EFG Eurobank slides 16.3%. The downgrade of the government debt rating of Cyprus to junk status by Fitch weighs heavily on sentiment. Also, market commentators are warning that the EU summit, which is scheduled to start Thursday, will likely be disheartening. “Policy makers look set to disappoint again,” says Capital Economics.
Prague Stocks End Sharply Lower
PX ends down 2.4% at 878.4 as banks pull the index lower amid uncertainty on European markets ahead of the EU summit later this week, a trader says. Erste bank ends down 4.7% and Komercni Banka slides 3%. “There is nervousness on markets, banks are being hit by concerns over possible impacts from proposals at the EU summit,” the trader adds. Miner NWR closes 1.2% lower on concerns the economic cooling will hit demand for coking coal, the trader notes.
StockMarketNews Research Team