By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Europe's key equity index edged higher
Monday, aided by gains for recently beaten-down Swiss shares, but
Greek banking stocks fell on concerns about the country's upcoming
general election.
The Stoxx Europe 600 picked up 0.1% to 352.79, a subdued move
after rising 3.7% over the past two sessions. Investors are on
watch for a possible announcement about a sovereign debt-buying
program by the European Central Bank when policy makers meet
Thursday.
There are still "significant questions" about how a
quantitative-easing program will be constructed, said Societe
Generale in a note on Monday.
"The ECB will not likely communicate on any specific volume
within its new package of measures, but rather on the effectiveness
of its package of measures," SG analysts said. The QE package will
eventually include 400 billion euros ($465 billion) of private
assets, and EUR500 billion to EUR600 billion of sovereign bonds,
they added.
Any announcement on quantitative easing would come ahead of
Greece's general election on Jan. 25. Most of Greek banking stocks
fell Monday as the latest opinion polls showed the anti-bailout
Syriza party holding a lead ahead of the election. There's been
concern in the market that Syriza will roll back austerity policies
if it were to win.
In Athens, shares of Eurobank Ergasias SA fell 4.1%, National
Bank of Greece SA declined 1.5%, Attica Bank SA fell 2% and Piraeus
Bank SA shed 0.6%. The Athex Composite turned lower by 0.4% to
787.34.
Also weighing on the Stoxx 600 were oil and gas stocks as oil
prices fell. U.S. oil futures (CLG5) fell 1.4% to $48.02, and Brent
crude oil pulled back 1.6% to $49.44. U.S. stock and bond markets
will be closed on Monday for the Martin Luther King Jr.
holiday.
J.P. Morgan Cazenove on Monday cut its ratings on oil majors
Royal Dutch Shell PLC and Total SA to neutral from overweight, and
BP PLC and Statoil to under weight from neutral. Shell shares fell
0.7%, Total dropped 0.6% and BP gave up 1.2%. Statoil shares were
off 0.5%.
The moves came as J.P. Morgan issued a fresh round of downgrades
to its oil and U.S. gas-price forecasts, including a projection for
Brent prices at $49 to $57 a barrel this year to 2016. "Though we
expect Big Oil to react with cuts to all controllable costs and
capex, the group starts 2015 a country mile behind the price
curve."
Read: Oil prices move lower on Monday as ECB in focus
Elsewhere in European trade, Swiss stocks were up for the first
day in four sessions, pushing the Swiss Market Index 3.2% higher to
8,154.59. The index on Thursday and Friday fell a combined 14.6%,
according to FactSet data, after the unexpected decision by the
Swiss National Bank to scrap its currency cap.
All components on the SMI were trading higher Monday, led by a
13.7% jump in shares of investment bank Julius Baer Gruppe and a
12% rise for drug maker Novartis AG .
U.K. stocks rose Monday, moving toward a third day of gains,
gaining alongside the broader European market as investors look
ahead to the possible launch of a bond-buying program from the
European Central Bank.
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