European shares fall for third day

Comment on this story
EU Flag http://www.sxc.hu/

London - Banking stocks dampened a tentative rebound in European shares on Tuesday as Germany's Commerzbank was said to have become the latest lender to be negotiating a costly legal settlement with US authorities.

Shares in the German lender fell 3 percent as sources told Reuters that US authorities had begun settlement talks with the bank and larger competitor Deutsche Bank, down 0.9 percent, over their dealings with countries blacklisted by the United States.

The New York Times reported that Commerzbank's settlement was expected to include at least $500 million in penalties. This compares to a nearly $9 billion settlement struck by France's BNP Paribas in a similar case earlier this year.

“I think Commerzbank's stock will suffer a bit but unless they get a very big fine like BNP, I don't think it will suffer like the other banks (hit by US investigations),” Mike Reuter, a broker at Tradition, said.

“If we see something below a billion (dollars) I think the market will accept that.”

At 09:43 SA time, the pan-European FTSEurofirst 300 index was down 0.1 percent at 1,380.32 points after trading slightly higher in early deals.

Italy's biggest insurer Generali was another top faller, dropping 2 percent, as Italian state-lender Cassa Depositi e Prestiti (CDP) said on Tuesday it had completed the placement of a 1.9 percent stake in the insurer at a discount to Monday's closing price.

It weighed on the Euro STOXX 50 index, which was also down 0.1 percent, at 3,227.21 points, taking its fall over the last three days to 1.8 percent.

The index has been making higher lows since December but on Monday it broke below its 50-day moving average, in what is often considered a bearish technical signal.

“Our view on the Euro STOXX 50 is still bullish as prices remain above a strong ascending trend line drawn from December 2013 (currently at 3,080 points),” Philippe Delabarre, an analyst at Trading Central, said.

“Nevertheless, yesterday, the break below the 50-day simple moving average was the first weakness signal. Our targets remain 3,330 and 3,440 points as long as 3,080 is a support threshold.” - Reuters



sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.