A Greek flag flutters outside the Athens Stock Exchange. The ATHEX index finished down 1.22% yesterday.


AFP/London



Europe’s main stock markets diverged yesterday as investors reacted to the fallout from the plunge of banking shares on the Athens stock exchange.
London’s benchmark FTSE 100 index slipped 0.03% to finish at 6,686.57 points.
In the eurozone, the CAC 40 in Paris slid 0.16% to end the day at 5,112.14 points, while Frankfurt’s DAX 30 rose 0.11% to close at 11,456.07 points.
In foreign exchange yesterday, the euro rose slightly to $1.0957 from $1.0954 late in New York on Monday.
The ATHEX index finished the day down 1.22% after suffering its steepest ever fall of 16.32% on Monday when trading resumed after a five-week shutdown imposed by the country’s debt crisis.
“A second day of declines on the Athens Stock Exchange and corporate earnings disappointments from BMW and Credit Agricole weighed on major European bourses,” said Jasper Lawler, market analyst at CMC Markets. “When stocks were first liquidated in Athens, a lot of the funds would have migrated into the rest of Europe,” he said.
Yesterday shares in Greek banks continued to fall heavily, with Piraeus dropping to the maximum allowed level of 30% for the second day running.
Eurobank shares fell 29.70%, those in Alpha Bank by 29.65% and National Bank by 28.45%.
In London, Royal Bank of Scotland rose a slight 0.41% to close at 339 pence after Britain’s government said it began selling its majority stake in the lender.
Edinburgh-based RBS was rescued with £45.5bn of public money, the world’s biggest banking bailout at the height of the financial crisis in 2008.
The government has sold at a loss 5.4% of RBS for £2.1bn ($3.3bn, €3.0bn) to reduce state debt and kickstart the lender’s full return to the private sector.
The Paris market was hit by the 10.17% plunge in shares of Credit Agricole, which closed at €12.94. The French bank announced yesterday it had to set aside provisions for possible fines related to a US investigation into payments in dollars to countries under embargo.
On the Frankfurt exchange, German automaker BMW slumped after it said yesterday that weaker demand from China could weigh on its full-year earnings, as it reported a slight drop in its second-quarter profits. Its shares closed down 1.28% at €90.88.
US equities were down slightly yesterday despite oil prices rallying and the Chinese stock market notching strong gains following new government measures to counter volatility.
Around mid-day in New York trading, the Dow Jones Industrial Average was down 0.09% to 17,583.23 points.
The broad-based S&P 500 slipped 0.07% to 2,096.63, while the tech-rich Nasdaq Composite Index shed 0.15% to 5,107.66.

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