Europe shares close down on EU rescue plan doubts

By Joanne Frearson

LONDON (BestGrowthStock) – European shares slipped on Tuesday over doubts the massive rescue plan which boosted stocks in the previous session was a long-term solution and whether Greece can deliver budget deficit cuts.

After losing more than 2 percent during the session, stocks trimmed losses in late trade as U.S. shares edged higher on Wall Street.

Banking stocks led the losers, with the STOXX Europe 600 banking index slipping 1.8 percent. Spanish banks Banco Santander and BBVA fell 3.3 and 3.1 percent respectively while Greek banks lost 4.9 percent.

The pan-European FTSEurofirst 300 index of top shares closed down 0.4 percent at 1,035.00 points after jumping 7.4 percent on Monday on euphoria over the euro zone’s $1 trillion rescue package.

“The roller coaster continues and these extraordinary measures have made it difficult to invest,” said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Frankfurt. “It is a politically driven market and there is a huge overnight risk.”

“Investors are very cautious and if in doubt they are out. The problems are still there and (the bailout measures) are only treating the symptoms.”

Investor confidence faded on doubts about whether weaker euro zone economies can meet their part of the bargain and deliver drastic debt cuts. The market also took a knock after Moody’s Investors Service said late Monday that it may downgrade Portugal’s ratings and could cut its investment grade rating of Greece to junk status.

UK banks HSBC, Barclays and Standard Chartered fell 1.3 to 3.1 percent while French bank BNP Paribas lost 2.3 percent.

COMMODS SLIP

Miners were also under pressure as copper lost 1.1 percent and Chinese annual inflation pushed up to an 18-month high in April, raising concerns about potential monetary tightening measures.

Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata lost 1.4 to 3.9 percent.

Energy stocks fell, with BP, BG Group, Total and Cairn Energy losing 0.7 to 1.6 percent.

In individual stocks, Spain’s Telefonica fell 3.7 percent after its hostile bid for Brazil’s Vivo was rejected by Portugal’s Portugal Telecom. However, Portugal Telecom soared 5.9 percent.

Carlsberg rose 2.1 percent after the world No. 4 brewer posts quarterly results above expectations. Across Europe, the FTSE 100 index fell 1 percent, Germany’s DAX rose 0.3 percent and France’s CAC 40 slipped 0.7 percent.

Investment

(Editing by David Cowell)

Europe shares close down on EU rescue plan doubts