A trader stands under the German share price index DAX board at the Frankfurt Stock Exchange. The DAX closed down 1.14% at 11,280.36 points yesterday.
AFP/London
Europe’s main stock markets slipped yesterday after recent strong gains, with traders sitting tight as the eurozone awaits fresh central bank stimulus.
London’s benchmark FTSE 100 index dropped 0.74% to close at 6,889.13 points after reaching a record intra-day high on Monday.
Frankfurt’s DAX 30 index sank 1.14% to close at 11,280.36 points, and in Paris the CAC 40 fell 0.98% to 4,869.25 points.
The euro increased to $1.1214 from $1.1182 late in New York on Monday.
“Equities have surged higher in recent weeks on hopes central banks’ record low interest rates, combined with the use of unconventional policy tools such as quantitative easing, will continue to drive yield-seeking investors into the stock markets and provide stimulus for economic growth,” said Fawad Razaqzada, technical analyst at FOREX.com trading group.
The European Central Bank will unveil tomorrow the details of the bond purchase programme it is embarking on later this month.
Greece is also likely to be at the top of the agenda after the recent eurozone deal to extend the aid programme for the debt-wracked country, followed by the latest talk of a possible third bailout, according to Spain’s economy minister.
The European Bank for Reconstruction and Development yesterday said it would begin funding critically needed investment in cash-strapped Greece as Athens nears the end of a massive bailout programme.
The EBRD said the programme would cover the next five years until 2020 but declined to give a figure for its potential investment after reports it could be as much as €1.0bn.
European markets also ended the day following a slump in US stocks after the key indices climbed to fresh heights on Monday.
Around mid-day in New York the Dow Jones Industrial Average was down 0.77% at 18,147.70 points, and the broad-based S&P 500 shed 0.64% to 2,103.76 points, after both finished at records on Monday.
The tech-rich Nasdaq Composite Index fell 0.83% to 4,966.66 points, the day after topping 5,000 for the first time in 15 years.
On the banking front in London, shares in Barclays closed down 3.22% to 254.30 pence after the embattled British bank said it had fallen into a net loss last year, hit by huge costs linked to its alleged role in the rigging of foreign exchange markets.
“The additional foreign exchange provision is unwelcome, whilst other regulatory discussions which may lead to further fines lurk in the background,” said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
On the other hand in Lisbon, shares in Portuguese banks BPI and BCP soared following the publication of a letter showing that businesswoman Isabel Dos Santos, daughter of the Angolan president, proposed studying a possible merger of the pair, which would create the largest private bank in Portugal.
On the Lisbon exchange yesterday shares in BPI surged 9.04% while BCP climbed 2.40%, with the PSI Index overall slumping 0.34%.
Dos Santos, who holds an 18.6% stake in BPI, is making a countermove to a takeover bid by Spain’s CaixaBank, BPI’s top stockholder with 44.1% of shares.
The Angolanbnaire said in her letter to the presidents of the three banks that the Spanish bank’s bid “does not reflect correctly the value” of BPI or “its growth potential”.
Also on the upside in London, British American Tobacco shares rose 0.28% to 3,767 pence after it outlined plans to take control of its Brazilian unit Souza Cruz.
