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05.07.2016 10:47 Major stock indices in Europe showing losses

05.07.2016 10:47

Stock indices in Europe, after rising to February's highs are declining for the second day in a row due to the fall of the financial and commodity sectors, while the Italian bank Monte dei Paschi reached a new record low.

The indices opened lower on fresh concerns about the global effects of Brexit, while investors focused on today's Bank of England report on financial stability.

Investors remain cautious after the shocking decision of Britain to leave the European Union sparked uncertainty about the consequences for the world economy as a whole.

On Monday, Nigel Farage, one of the main supporters of Brexit campaign, resigned from his post as head of the UK Independence Party, saying that he "played his role."

On Tuesday, the research firm Markit Economics published the final PMI data for eurozone countries.

Composite PMI in eurozone remained at the May level of 53.1 points, although preliminary data point to a decline to 52.8 points.

The service sector indicator fell to 52.8 points from 53.3 points. It was expected a more significant fall - to 52.4 points.

 

The composite index of the largest companies in the region, Stoxx Europe 600, fell during trading 1,4% - to 325.30 points. Last week, the index jumped 7.6%, recovering more than half of the losses incurred as a result of the British decision to leave the EU.

All 19 industry subgroups of Stoxx Europe 600 Index show losses.

The capitalization of Italian banks fell for the third consecutive session.

As it became known earlier, the Italian Government is considering the possibility of recapitalization of banks in the country at the expense of budget funds. In particular, plans for Banca Monte dei Paschi di Siena involve the issue of new convertible bonds in favor of the state in the amount of no less than 3 billion euros. On this news the bank's shares fell 5.4%.

This measure surely meet resistance from the EU authorities, noted Fitch.

The price of shares of Chr. Hansen Holding, which produces natural colors and enzymes for food products decreased by 5.1% on the data worse than expected about quarterly sales.

Securities of the construction company Balfour Beatty fell by 2.6%.

Shares of British developer Persimmon fell 5.4%. The company reported an increase in revenue in the first half of 2016 by 12% to 1.49 billion pounds.

Sports Direct Shares fell 5% as the group should report on Thursday about the drop in profits due to lower sales in the summer against the backdrop of bad weather.

Shares of British American Tobacco rise by 0.9% after Credit Suisse analysts confirmed their rating to "outperform."

At the moment:

FTSE 6525.09 2.83 0.04%

DAX 9575.40 -133.69 -1.38%

CAC 4177.72 -57.14 -1.35%

 
 


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