Europe stocks fall, as Banca Monte dei Paschi stands on the brink

European stock markets dropped on Thursday, as Banca Monte dei Paschi di Siena SpA’s eleventh-hour bid to raise capital looked set to fail, dragging bank shares lower.

The Stoxx Europe 600 index was down 0.2% at 359.73, with only the health care, oil and gas and financial sector notching small gains.

The benchmark on Wednesday fell 0.2%, as banking shares throughout the region came under pressure.

BMPS heads for bailout? In Milan, on the FTSE MIB index shares of Banca Monte dei Paschi di Siena rose 3.2%, in a turnaround to early action. The shares initially fell 6.8%, after a sluggish start to trading. BMPS, the world’s oldest lender, has been trying to raise 5 billion euros in new private capital as it struggles under a bad loan burden. Those efforts look to have failed, after the bank said it had lost a key investor — thought to be Qatari — leaving BMPS waiting to hear whether the Italian government will bail it out.

But other Italian bank stocks rose. Banca Popolare di Milano gained 1.7%, Banco Popolare tacked on 1.6%, UniCredit SpA gained 1.3%, and Unione di Banche Italiane SpA was higher by 0.9%. Overall, the FTSE Italia All-Share Bank Index was up 0.4% on Thursday.

Across the region, though, bank stocks sagged, pulling down the Stoxx Europe 600 Bank Index 0.1% lower. German lender Deutsche Bank AG and its U.K. peer Barclays PLC each slipped 0.2%

Other movers: Actelion Ltd. shares bounced up 6.1% as the Swiss drug maker re-entered acquisition talks with Johnson & Johnson.

The euro was buying $1.0445 compared with $1.0431 late Wednesday in New York.

Indexes: Italy’s FTSE MIB index rose 0.3% to 19,269.05, and Germany’s DAX 30 index shed 0.1% to 11,454.43.

France’s CAC 40 index was flat at 4,833.62, while the U.K.’s FTSE 100 index dipped 0.1% at 7,032.74. Spain’s IBEX 35 slipped 0.1%.

Source: MarketWatch

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