Date: Monday 28 May 2012
- Spanish bank Bankia seeking 19bn euros in state aid
- Greek opinion polls swing to pro-bailout New Democracy
- Mining stocks up on copper price
Stoxx 600: -0.08%
Ibex 35: -2.2%
FTSE MIB: -0.74%
European stock markets were broadly down by the close on Monday as the plight of Spanish lender Bankia sent bank shares lower.
Bankia was taken into state ownership earlier this month, it now says it needs €19bn in state aid, prompting a share price plunge of 13% and questions as to whether the Spanish government, already stretched to breaking point, has the funds to help.
Bankia has now made provisions for €5.5bn in loans made outside the real estate sector, although it also faces significant losses on its mortgage book.
In Greece, six opinion polls have now shown the pro-bailout New Democracy party leading amongst voters as the country prepares to vote in elections in June. If New Democracy wins a clear majority most observers believe it would make a Greek exit from the Eurozone less likely.
Data from the Italian national statistics office surprised on the downside, with an index of sentiment in the manufacturing sector falling to 86.2 in May, from 89.1 in April. It is now at its lowest level since the summer of 2009.
The weakest sector on the Stoxx Europe 600 index was utilities (-1.33%), closely followed by banks (-1.08%).
There was more positive news for basic resource stocks, which led the index, up 1.39%. The copper price has been rising of late on news of low stock levels in China.
Anglo-Spanish International Consolidated Airlines Group (IAG), which owns Iberia and British Airways dropped 2.7% after speculation that its biggest shareholder, Bankia (yes, the very troubled lender mentioned earlier) may be forced to dump its stock.
French film production company Technicolor rose a spectacular 8.9% after a leading investor (Vector Capital) promised to support a €186m capital raising and increase its stake in the firm to nearly 30%.
The euro had gained 0.23% against the dollar by 16:51 London time to sit at $1.2546.
The cost of a futures contract (June) on a barrel of Brent crude had gained 0.45% by 16:37 in London to stand at $107.31.
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