Europe close: Lenders drag stocks lower
European stocks were in the red as a gauge of banking stock edged lower.
Banks were among the biggest fallers on the Stoxx 600, as Barclays said it was setting aside an additional £750m for the settlement of a currency-manipulation probe and posted its full-year results. ING Groep NV and BNP Paribas SA also declined.
The slump in lenders offset a better-than-estimated report on German retail sales. Sales rose 5.3% in January, compared to a 4.8% increase a month earlier and forecast for a 3% gain. German retail growth was supported by cheaper oil, healthy income increases and low interest rates.
“The pace of expansion is unlikely to remain at these heady levels, but the fundamentals for consumption are very solid,” said Christian Schulz, analyst at Berenberg.
“The sudden German strength also highlights the good timing of the ECB, as announcing QE now would have faced more resistance inside and outside the ECB than back in January.”
The European Central Bank’s €1trn quantitative easing package begins Thursday when it also announces its latest policy decision.
In the UK, the Markit/CIPS UK construction purchasing managers’ index (PMI) rose to 60.1 in February from 59.1 in January, as it continues to rebound from the 17-month low reached in December. Readings above 50 indicate an expansion in activity and the PMI has now been above this threshold for the 22nd successive month.
Greek debt
Greece is set to receive financing from the European Bank for Reconstruction and Development through 2020 to promote an economic overhaul. The programme is aimed at supporting private enterprises.
“There are two broad areas where the EBRD might well make a number of operations: firstly helping Greek companies regain access to finance,” EBRD President Suma Chakrabarti said in Brussels on Tuesday. “The other area we’d like to do more to promote is regional economic integration, bring private sector knowledge and finance to such areas as energy and infrastructure.”
The news followed claims by Spain’s finance minister Luis de Guindos that EU and Greek officials were negotiating another bailout of between €30bn and €50bn. EU officials said there were no such talks and Greek officials declined to comment.
Greece has been granted a four-month extension to its bailout programme after Eurozone creditors approved a list of reforms to turn Greece’s economy around. Greece will present the details of the reforms at a meeting of Eurozone finance ministers on 9 March.
The euro increased 0.19% to $1.1205.
Deutsche Telekom AG declines
Deutsche Telekom AG edged lower after its chief executive urged a reduction in the number of landline and wireless network providers in Europe to cut costs.
Glencore slid after posting a 7% drop in net income amid falling resource prices.
Vivendi gained 1.5 percent after Bollore Group increased its holding of the French media company.
Fiat Chrysler Automobiles NV slipped after posting a rise in February sales that missed analysts’ estimates.
Paddy Power advanced after saying it plans to return €8 a share to investors and reported annual sales and operating profit that exceeded consensus forecasts.
Brent crude futures rose 2.9% to $61.36 per barrel at close of trading, according to the ICE.