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Europe: Stock markets nudge lower at open

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[LONDON] Europe's main stock markets drifted 0.2 per cent lower at the open on Thursday, with many traders away for an extended festive break.

London's benchmark FTSE 100 index of top blue-chip companies declined to 7,029.01 points, Frankfurt's DAX 30 stood at 11,444.41 points and the CAC 40 in Paris dropped to 4,825.15.

All three main indices had also retreated on Wednesday, as focus again shifted to the fate of Italy's troubled bank Monte dei Paschi di Siena.

"Financial markets are calm, as traders slow down activity moving into the year-end holiday session," noted LCG analyst Ipek Ozkardeskaya.

Market voices on:

"Monte dei Paschi remains the major highlight in Europe. Funds raised by Paschi's debt swap progressed to 2.07 billion euros (S$3.12 billion). The bank needs to raise 5.0 billion euros worth of capital to be saved.

"The low probability of achieving this amount increases odds of some kind of government rescue."

The bank itself has admitted it has only four months' worth of liquidity left. The results of the capital increase are due to be released on Thursday.

"Once again the main news surrounded Monte dei Paschi," added Connor Campbell at Spreadex.

"This news has begun to drag on the rest of the European banking sector, with the likes of Deutsche Bank, Barclays and Lloyds all dipping their toes into the red after the bell."