Tuesday, 04 August 2015 21:52
LONDON: Europe’s main stock markets diverged on Tuesday as investors reacted to the fallout from the plunge of banking shares on the Athens stock exchange.
London’s benchmark FTSE 100 index slipped 0.03 percent to finish at 6,686.57 points.
In the eurozone, the CAC 40 in Paris slid 0.16 percent to end the day at 5,112.14 points, while Frankfurt’s DAX 30 rose 0.11 percent to close at 11,456.07 points.
In foreign exchange on Tuesday, the euro rose slightly to $ 1.0957 from $ 1.0954 late in New York on Monday.
The ATHEX index finished the day down 1.22 percent after suffering its steepest ever fall of 16.32 percent on Monday when trading resumed after a five-week shutdown imposed by the country’s debt crisis.
“A second day of declines on the Athens Stock Exchange and corporate earnings disappointments from BMW and Credit Agricole weighed on major European bourses,” said Jasper Lawler, market analyst at CMC Markets.
“When stocks were first liquidated in Athens, a lot of the funds would have migrated into the rest of Europe. By the second day, concern over another day of declines in Greece hit wider confidence in the region,” he said.
On Tuesday shares in Greek banks continued to fall heavily, with Piraeus dropping to the maximum allowed level of 30 percent for the second day running.
Eurobank shares fell 29.70 percent, those in Alpha Bank by 29.65 percent and National Bank by 28.45 percent.
In London, Royal Bank of Scotland rose a slight 0.41 percent to close at 339 pence after Britain’s government said it began selling its majority stake in the lender.
Edinburgh-based RBS was rescued with £45.5 billion of public money, the world’s biggest banking bailout at the height of the financial crisis in 2008.
The government has sold at a loss 5.4 percent of RBS for £2.1 billion ($ 3.3 billion, 3.0 billion euros) to reduce state debt and kickstart the lender’s full return to the private sector.
The Paris market was hit by the 10.17 percent plunge in shares of Credit Agricole, which closed at 12.94 euros. The French bank announced Tuesday it had to set aside provisions for possible fines related to a US investigation into payments in dollars to countries under embargo.
On the Frankfurt exchange, German automaker BMW slumped after it said Tuesday that weaker demand from China could weigh on its full-year earnings, as it reported a slight drop in its second-quarter profits. Its shares closed down 1.28 percent at 90.88 euros.
US equities were down slightly on Tuesday despite oil prices rallying and the Chinese stock market notching strong gains following new government measures to counter volatility.
Around mid-day in New York trading, the Dow Jones Industrial Average was down 0.09 percent to 17,583.23 points.
The broad-based S&P 500 slipped 0.07 percent to 2,096.63, while the tech-rich Nasdaq Composite Index shed 0.15 percent to 5,107.66.
Asian stocks closed mixed on Tuesday as China announced new rules restricting short selling after a recent market rout and Australia held interest rates at rock-bottom.
Shanghai jumped 3.69 percent, Tokyo eased 0.14 percent while Hong Kong ended flat and Australia advanced 0.33 percent.
