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Europe: markets seesaw

Daria Bulanova, Analyst, Global Markets (Finam)


IndexCountryValueChangeChange, %YTD, %
ATX Austria 2 379,69 -41,99 -1,73% -0,90%
BEL20 Index Belgium 2 595,18 -24,37 -0,93% 4,82%
FTSE 100 United Kingdom 6 378,38 -14,38 -0,22% 8,15%
DAX Index Germany 7 870,90 -40,45 -0,51% 3,40%
IBEX 35 INDEX Spain 8 140,60 -188,9 -2,27% -0,33%
S&P/MIB Italy 15 644,36 -401,15 -2,50% -3,87%
AEX Netherlands 348,72 -2,02 -0,58% 1,75%
OMX Nordic 40 Scandinavia 1 155,26 3,38 0,29% 8,90%
CAC 40 France 3 727,98 -42,31 -1,12% 2,39%
SMI Switzerland 7 758,22 13,89 0,18% 13,72%

On Monday, March 25, European equities turned lower. The relief rally on the heels of the troika-Cyprus accord turned out to be short-lived and investors went negative again. The cost to be paid by the island nation is far too high and it will clearly take years for the banking system to recuperate.

German Finance Minister Wolfgang Schaeuble noted on Monday that Cyprus faces a long uphill struggle to get its economy back on track, underscoring that the agreement struck with international lenders is the best way out. Jeroen Dijsselbloem, the Eurogroup’s chairman, in turn, was quoted by the media as having said that the newly-developed rescue model for Cyprus can be used for other Eurozone member states with troubled banking sectors. Italy placed a EUR 3.825 bn bond issue on Monday, while a volume of up to EUR 4 bn had been projected. It is noteworthy that bond yields moved higher during the placement, pushed up yields on Italian 10-year government bonds 8 bps higher to 4.59% on the secondary market.

Recapping the indexes, the regional barometer STXE 600 inched down 0.27% to close at 293.25. Germany’s DAX gave up 0.51%, France’s CAC 40 sank 1.12%, while Britain’s FTSE 100 was off 0.22%.

In the banking sector, Italian lenders sustained major losses, with Intesa Sanpaolo slumping 6.2%, Banco Popolare and UniCredit plunging 5.9% and 5.8%, respectively. Spanish Banco Santander, in turn, slid 3.2%.

Germany’s major banks also headed south, with Deutsche Bank sagging 3.2% and Commerzbank sinking 1.7%. According to knowledgeable sources, UK’s mobile carrier Vodafone Group is mulling the sale of its 45% interest in the joint venture with No. 2 US telephone company Verizon Communications. Vodafone’s stock jumped 2% on the news.

In other news, Dutch bakery and ingredients group CSM has agreed to sell its bakery supplies division to the US Rhone Capital for about EUR 1.05 bn (USD 1.4 bn). CSM’s shares spiked 6.4% on the announcement.

By 7.17 GMT key regional indexes showed positive dynamics in spite of persisting worries over Cyprus. Britain’s FTSE 100 futures for June delivery were 0.07% higher, Germany’s DAX futures for June delivery were up 0.22% and France’s April CAC 40 futures were 0.36% higher.