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Europe: Shares fall for 6th day, Spain's Ibex underperforms


[LONDON] European equities fell for a sixth straight session on Monday, with energy shares tracking weaker crude oil prices and financial stocks losing ground.

Europe's Stoxx 600 fell 0.5 per cent, ending its second month of losses.

Spain's benchmark Ibex index, which has shown resilience during months of political gridlock, fell 0.6 per cent after lawmakers agreed to grant conservative leader Mariano Rajoy a second term as prime minister.

"Over the course of last few weeks, it became quite clear that Mr Rajoy was going to get a free run. Also, the Spanish economy has done pretty well even without a stable government and the market has performed relatively better," said Peter Dixon, economist at Commerzbank.

Market voices on:

"Investors are treating Spain like all other markets. When everybody else gets some wobble, then Spain gets it too."

The Ibex is down 4.2 per cent so far this year, outperforming the 7.2 per cent decline in the Stoxx 600.

Among Monday's sector movers, the Stoxx Europe 600 Oil and Gas index fell 1.5 per cent, the top decliner, as crude dropped more than one US dollar a barrel to hit one-months low on doubts about Opec's planned production cut and a build in US crude inventories at the Cushing, Oklahoma, storage hub.

"We do seem to be in this ongoing situation of oversupply and until we see signs that the situation is turning around, oil and energy stocks will remain under pressure. It's going to be a theme for the reminder of the year," Mr Dixon said.

Financials also came under pressure after some banks posted disappointing earnings, with the sector index falling 0.7 per cent. Shares in UniCredit, Natixis and Royal Bank of Scotland fell 2.5 to 3.8 per cent.

Swiss chemicals company Sika surged 12 per cent to a record high after saying it had won the latest round in a takeover battle with Saint-Gobain, whose shares were down one per cent. Sika was the biggest Stoxx gainer.

Swedish measurement technology firm Hexagon fell 10 per cent, the top faller, after its top executive, Ola Rollen, was detained under investigation over suspected insider trading in Norway. Mr Rollen denied the accusation, his lawyers said.