European bourses slightly higher in thin holiday trade

European stock markets were mildly higher during Tuesday morning trade amid thin volumes during the holiday period in the region.

The German DAX was up 0.16 percent, while the French CAC was trading 0.7 percent higher. London’s FTSE 100 is closed for a public holiday.

European trade followed the muted session in Asia where low volumes have sent shares mildly higher.

In the U.S. on Friday, equity markets closed mostly flat on Friday ahead of the Christmas holiday, as the Dow Jones industrial average failed again to reach the psychologically important level of 20,000.

BMPS recapitalization in focus

Investors are eyeing Banca Monte dei Paschi di Siena after the European Central Bank told the troubled Italian lender that it needs to plug an 8.8 billion euro ($9.2 billion) capital shortfall. Shares in the lender have not yet opened for trade. But there is caution around the broader Italian banking sector.

Banco Popolare and Banca Popolare di Milano were both in negative territory.

Analysts said that the European banking sector is in better health compared to a year ago but investors should still be cautious.

“We are certainly in a much better position than this time last year because we have a little bit more certainty particularly in regards to the capital position of many different banks around Europe,” Maximilian Kunkel, ultra-high-net-worth investment strategist at UBS Wealth Management, told CNBC in a TV interview on Tuesday.

“But all in all, I think the overall picture is still one where although valuations continue to look relatively attractive … mid-cycle ROEs (return on equity), according to our calculations, are not going to surpass 8 or 9 percent, so all in all we are staying neutral on the sector.”

German carmakers sell stake in mapping software

In other news, German carmakers BMW, Daimler and Volkswagen sold a stake in the HERE mapping system they own to China’s NavInfo and Tencent, and Singapore sovereign wealth fund GIC. Shares of all three auto firms were in positive territory.

Meanwhile, a tick up in the oil price helped stocks in the oil and gas sector such as Italy’s Saipem and Spain’s Repsol.

Source: CNBC

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