11 juin: GlaxoSmithKline Buys Back 1.6 Million Shares For Treasury
11 juin: Facebook Absorbs Team at Mobile Software Firm Pieceable
11/06/2012 19:06:00

MARKET COMMENT: Europe Stocks Erase Gains on Spain Aid Questions

By Sara Sjolin

Spanish and Italian bond yields surged on Monday after a choppy session, where European stock markets erased earlier gains as investors questioned the details of Spain's bank aid-deal, while worries about Greece stirred uncertainty.

The Stoxx Europe 600 index closed slightly lower at 241.92, coming off its session high of 246.62.

News over the weekend that Spanish Finance Minister Luis de Guindos asked the European Union for as much as 100 billion euros ($125.3 billion) in loans to help the struggling banks prompted investors to jump into European equities early in the session. The aid will be provided by the European Financial Stability Facility and the European Stability Mechanism.

"While we believe the latest developments certainly do provide for some real comfort this time, it's not the absolute game-changer that the euro-zone crisis needs to be resolved," analysts from RBC Capital Markets said in a note. "This will effectively increase the Spanish debt-to-GDP ratio but how this will impact the cost of funding for Spain in the medium term remains to be seen."

Yields on 10-year Spanish government bonds surged 23 basis points to 6.42%, according to Tradeweb. A basis point is one one-hundredth of a percentage point.

Spanish stocks ended the session on a down note, after rallying almost 6% at the market open. The IBEX 35 index closed 0.5% lower at 6,516.40.

Markets started to curb the initial euphoria in afternoon action, as questions about deal details and whether Spain will be asking for the maximum amount of EUR100 billion stirred uncertainty.

A report from the International Monetary Fund showed last Friday that the Spanish banking system would need EUR40 billion to meet international standards inf the event of economic shocks.

Italian stocks trailed the rest of Europe, as the country's banks came under heavy selling pressure. UniCredit SpA lost 8.8%, and Banco Popolare SC and Intesa Sanpaolo SpA both slid 5.9%. The FTSE MIB index lost 2.8% to 13,070.75.

Yields on 10-year Italian government bonds jumped 27 basis points to 6.02%, according to Tradeweb.

"Focus has now shifted from Spain and markets are starting to raise questions about the Italian banking system and the Italian economy," said Stephen Pope, managing partner at Spotlight Ideas. "It's a case where Italy has the same government debt problems that Greece has combined with the banking sector problem that Spain has."

The euro also erased earlier gains and moved down to $1.2495 from $1.2512 late Friday in North American trading.

In the U.S., stocks were lower on Wall Street, while Asian bourses closed the day with solid gains.

Equities are likely to fall further at the end of the week, as the Greek election on Sunday could shake up markets again, Jonathan Bristow, broker at Valbury Capital, said.

"From Wednesday we might find investors reluctant to do anything and there'll probably be a selloff on Friday. I wouldn't want to hold any European equities or bonds over the weekend, because of concerns about Greece," he said. "It's such an important outcome, so you're better off getting out of your positions on Friday. It doesn't matter if you miss the start of the move after the election, because it will be big move whether [the election results] will help Greece stay in the euro or get it kicked out," he added. "If you're on the wrong side, it's quite hard."

Investors were also looking to Asia, where a mixed bag of economic data out of China over the weekend fueled speculation of further easing from the Chinese government. Last week, the People's Bank of China surprisingly cut interest rates for the first time since 2008.

"With increasing downside risk globally and domestic inflationary pressure easing fast, monetary and fiscal policy are now being eased more aggressively," analysts at Danske Bank said in a note. They forecast the central bank will cut leading interest rates twice by 25 basis points before year-end.

In the rest of Europe, stock markets painted a mixed picture. In Germany, the DAX 30 index gained 0.2% to 6,141.05 as car makers Volkswagen AG moved 1.3% higher. Data showed global car sales at BMW AG and Volkswagen AG's Audi brand reached new monthly record highs in May, as surging demand in China more than offset dampened demand in Europe.

Shares of BMW were, however, off 0.1%.

Among U.K. stocks, some banks and oil firms advanced. Oil group BP PLC gained 1.4%, while Lloyds Banking Group PLC ticked 1.7% higher and HSBC Holdings PLC climbed 0.5%.

The gains weren't enough to keep the FTSE 100 index afloat, the index losing 0.1% to 5,432.37.

In France, the CAC 40 index slipped 0.3% at 3,042.76, as banks tripped. Credit Agricole SA fell 3.7%, Societe Generale SA lost 3.1% and BNP Paribas SA gave up 1.7%.

Write to Sara Sjolin at AskNewswires@dowjones.com

(END) Dow Jones Newswires

June 11, 2012 13:06 ET (17:06 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

11 juin: GlaxoSmithKline Buys Back 1.6 Million Shares For Treasury
11 juin: Facebook Absorbs Team at Mobile Software Firm Pieceable

Envoyer un commentaire

Related debate

  • 1 semaine
  • 1 mois
  • 1 an
27 janv.
OMXC20
  Jeg er blevet bedt om at beskrive, hvordan man arbejder effektivt som investor. Det vil jeg gerne,..
72
26 janv.
PNDORA
At forstå Pandora er ikke bare at elske eller hade charms og evt. kalde selskabets smykker for "blik..
42
24 janv.
VWS
  På den lille ø Rügen ud for Stralsund i Tyskland var der under 2. verdenskrig en del af Hitlers vå..
25
24 janv.
VWS
Jeg kan da ikke tale en skid op. Men jeg kan dele et overblik over selskabet som andre ikke har. Men..
19
21 janv.
GEN
I anledning af at Genmab er gået over 400 har jeg lavet et indlæg om forskellige forhold der kan dri..
18
25 janv.
TORM
Torm havde væsentligt flere skibe i 2008 end de har nu, så jeg tror ikke du skal være så ked af, at ..
17
27 janv.
OMXC20
Dagblabdet Børsen bruger spalteplads til at hylde daytradere, der scorer kassen på højt gearede posi..
15
24 janv.
VWS
I stedet for at bruge så mange kræfter på mig syntes jeg at du skulle bruge dem på at lave de kritis..
15
21 janv.
ATLA-DKK
Man skal ikke kaste med sten når man selv bor i glashus - tror du ved hvad jeg mener.   Og dit skriv..
15
27 janv.
I:SP500
I forlængelse af diskussionen med investor1989 forleden dag (hvor jeg løb tør for taletid) følger he..
14

Actualité la plus lue

  • 24 heures
  • 48 heures
  • 1 semaine
1
CRCAM SUD RHONE ALPES : Communiqué financier sur les résultats de la Caisse Régionale au 31 décembre 2014
2
Crédit Agricole Brie Picardie : Résultats au 31 décembre 2014
3
ESKER : Esker acquiert la startup américaine TermSync
4
STMicroelectronics annonce ses résultats financiers pour le quatrième trimestre et l'exercice 2014
5
Atos dévoile sa vision de l'environnement économique dans Ascent Journey 2018 - the 3rd digital revolution - agility and fragility

Droit d'auteur Euroinvestor A/S 2015   Mentions légales et conditions d'utilisation
Information sur les cours fournies par Interactive Data.
Les données sont différées de 15 à 20 minutes selon les accords avec les différentes bourses internationales.
 
mercredi 28 janvier 2015 17:09:59
(UTC+01:00) Brussels, Copenhagen, Madrid, Paris
Version: LiveBranchBuild_20150128.1 - EUROWEB3 - 2015-01-28 17:09:59 - 2015-01-28 17:09:59 - 4 - Website: OKAY