UPDATE 2-More pressure on banks keeps European shares sluggish

By Kitco News / February 04, 2019 / www.kitco.com / Article Link


* STOXX 600 flat
* Euro zone banks down for sixth day
* Wirecard bounces back (Recasts, adds details, closing prices)By Danilo Masoni and Julien PonthusMILAN/LONDON, Feb 4 (Reuters) - European shares were flat onMonday as the heavyweight banking sector fell further followingpoor results from Julius Baer and as optimism fueled by strongU.S. economic data faded.The pan-European STOXX 600 index added 0.1 percentafter being lifted on Friday by upbeat U.S. jobs data whichhelped eased worries over the health of the global economy.


Euro zone stocks fell 0.1 percent, while the UK'sFTSE 100 rose 0.2 percent, helped by a weaker pound.Banks were the biggest drag to the STOXX 600 with JuliusBaer falling more than 4 percent after a tough end to2018 caused the Swiss private bank to scale back growth targets.Julius Baer said it would cut around 2 percent of its staffas part of a 100 million Swiss franc cost saving plan. Banks have lagged the early 2019 stock market bounce onconcerns over a slowing economy, with central banks signaling apause in tightening measures also hitting the rate-sensitivesector.


"With the ECB still in rate assessment mode and the Fedsignaling pause, European banks remain hostage to central banks'dovish stances," said JP Morgan Cazenove analysts."The fourth quarter of 2018 has been disappointing so far,leading to 3-5 percent EPS cuts... and hence short-term shareprice risk needs to be 'flushed out' first," they added.


The euro zone bank , down 1.2 percent on the day,fell for the sixth straight session, suffering their longestlosing streak since October 2018.Spanish banks Sabadell and Caixabank were among the biggest losers, down 4.8 and 4.5 percentrespectively, following a price target downgrade from UBS.


German payment company Wirecard soared 13.7percent after it said its law firm found no conclusive evidenceof criminal misconduct. The Financial Times last week allegedfinancial wrongdoing at its Singapore office, sending its sharesdown as much as 40 percent. Ferrexpo dropped 7.9 percent after the iron orepellet producer said an ongoing review of statements of acharitable foundation in Ukraine to which it made donations mayaffect its books. Denmark's DSV fell 2.1 percent after its bid forPanalpina hit a road block when the Swiss freightforwarder's top shareholder rejected the offer. Panalpina tumbled 11.7 percent.


Pan-European stock market operator Euronext fell0.5 percent after saying it may sweeten its offer for Oslo BorsVPS as Nasdaq made a rival bid.


Ryanair fell 1.9 percent after the Irish budgetairline reported a 20 million-euro loss in the third quarter,its first since 2014. Corporate news is set to intensify throughout the week withtrading updates on Wednesday and Thursday, notably from BNPParibas and ING among banks and Sanofi and GlaxoSmithKline for pharmaceuticals.
(Reporting by Danilo Masoni and Julien PonthusEditing by Gareth Jones)

danilo.masoni.thomsonreuters.com@reuters.net; On Twitter Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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