You are here

Europe: Stocks supported by banks, utilities before UK election

Europe Stocks.jpg

[LONDON] Banks and utilities supported European stocks on Wednesday, with relief that Spain's struggling Banco Popular was being rescued by Santander lifting bank shares.

The STOXX 600 index fell 0.1 per cent, weighed down by a late drop in energy stocks. Crude oil prices plunged after data showed US stocks of crude oil and petrol surprisingly rose last week.

Britain's FTSE 100 index fell 0.6 per cent and Germany's DAX inched 0.1 per ..cent.

Although shares in Santander fell 0.9 per cent in choppy trade and Banco Popular's were suspended, European banks were among the standout performers, gaining 0.7 per cent. Santander said it would buy Popular and carry out a capital increase of around 7 billion euros (S$10.9 billion).

"As a stand-alone bank, (Popular) was close to failing ... and the failure of any bank, as we've seen in the past, can set of that chain of events where the whole banking sector gets freaked out, investors especially," said Mike van Dulken, head of research at Accendo Markets.

Your feedback is important to us

Tell us what you think. Email us at

Spain's Bankia, Italy's UniCredit and France's Societe Generale were all up between 1 per cent and 4.9 per cent.

European utilities also gained, led by Germany's E.ON and RWE. Both rose more than 5 per cent after the country's highest court declared a nuclear fuel tax illegal, enabling them to claim back 6 billion euros in cash.

Shares in Swedish biometric firm Fingerprint Cards were the top STOXX risers, jumping 11.6 per cent, after confirming an order for its sensors.

On the downside, Covestro dropped 4.6 per cent after Bayer cut its stake in the plastics maker to 44.8 per cent from 53.3 per cent.

Investors were also looking ahead to the British election on Thursday, as well as the European Central Bank's policy meeting.

"Whatever the outcome on Friday morning, markets actually have very little to go on to be able to judge whether such a new government would be more or less successful in negotiations with the EU," Don Smith, chief investment officer at Brown Shipley, said in a note.

"We are unlikely to see anything like the huge fluctuations in markets that occurred in the immediate wake of last summer's referendum," Mr Smith added, referring to the Britain's vote last June to leave the European Union.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to