Europe stocks decline as banks lead Greek, Italian shares lower
By Bloomberg
A decline in Greek and Italian lenders helped European stocks post a fourth drop in five days.
Banca Monte dei Paschi di Siena SpA, Alpha Bank AE and National Bank of Greece SA fell more than 2 percent, dragging benchmark stock gauges for Italy and Greece lower. French lenders also dropped, with Credit Agricole SA down 3.5 percent after Nomura Holdings Inc. lowered its rating on the stock. Societe Generale SA fell 2.5 percent.
The Stoxx Europe 600 Index fell 0.2 percent to 395.59 at 1:23 p.m. in London and lost as much as 0.7, reversing an earlier gain of as much as 0.6 percent.
“On a day when Greek stocks sell off, you often see infection passing to the Italian banking sector,” Lorne Baring, managing director at B Capital SA in Geneva, said by telephone. “The Greek situation still looks stuck and that is a negative in a period where there aren’t significant drivers to take the market higher.”
Greece’s ASE Index lost 1.8 percent, the most among western-European markets, as a gauge tracking its lenders fell 3.9 percent. The nation’s banks are running short on the collateral they need to stay alive as lenders use collateral parked at the Greek central bank to tap more and more emergency liquidity in a lifeline that could be maxed out within three weeks.
Italy’s FTSE MIB Index lost 1.7 percent, while benchmark gauges of Spain and Portugal declined more than 0.8 percent. France’s CAC 40 Index slid 0.7 percent.
Stoxx 600 automakers rose, with Porsche Automobil Holding SE and Volkswagen AG climbing more than 2.2 percent as the euro weakened. The moves sent Germany’s DAX Index up as much as 1.2 percent before it traded little changed. German shares were the biggest decliners after Greek stocks last week.
Swiss Stocks
The Swiss Market Index climbed 0.6 percent, posting the largest gain among western-European gauges. Swatch Group AG rose 2.7 percent as Credit Suisse Group AG raised the stock to the equivalent of a buy rating. Transocean Ltd. added 3.1 percent.
Fresnillo Plc climbed 37 percent after saying its silver production target for 2018 remains in place. Marks & Spencer Group Plc gained 2 percent after a report that the retailer may return cash to shareholders. Aveva Group Plc jumped 9.9 percent after the Sunday Times said Schneider Electric SE has held talks with bankers about a bid for Aveva. Orpea added 2.2 percent after the nursing-home operator said it will buy Celenus Kliniken, a provider of rehabilitation and psychiatric centers.
Edenred slid 2.5 percent after the French company that sells prepaid meal vouchers said its chief executive officer will leave on July 31. OMV AG tumbled 7.2 percent as the refiner reported earnings that missed estimates.
The Stoxx 600 dropped 0.9 percent last week as the euro gained, bonds tumbled and economic data in the U.S. missed estimates. The European benchmark index lost 4.3 percent from its record in April through Friday, trimming its annual advance to 16 percent.
The volume of Stoxx 600 shares changing hands was 16 percent lower than the 30-day average.