By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets sustained
broad-based losses Monday, with investors jittery as euro-zone
finance ministers meet to again discuss Greece and after Catalonian
voters in Spain backed pro-independence parties in a weekend
election.
The Stoxx Europe 600 index fell 0.6% to 271.71, a reversal after
putting in its best performance in nearly a year last week.
"Greece is still the core story and in focus today with the
finance ministers' meeting," said Keith Bowman, equity analyst at
Hargreaves Lansdown.
"But most stock market reaction is priced in. Investors are
hopeful that we'll get some sort of agreement and if not today then
it may just happen another day this week," he said.
Among notable decliners in the Stoxx Europe 600, shares of
ThyssenKrupp AG lost 4.9%, retreating after Credit Suisse cut its
rating on the German conglomerate to neutral, down from outperform
previously.
In a similar vein, shares of Akzo Nobel NV gave up 1.1%.
Citigroup downgraded its rating on the paint and coatings company
to sell from neutral.
Meanwhile, shares of Barclays PLC (BCS) shed 4.9%, after Qatar
Holding said it sold its remaining warrants in the U.K. bank but
kept its 6.7% stake.
Nokia Corp. shares lost 1.6%. Damian Dinning, the Finnish
handset maker's imaging-tech chief, told the pureviewclub.com that
he is stepping down to join Jaguar Land Rover, as staying with
Nokia would have meant relocating to Finland from the U.K., which
was not an option for his family. Nokia confirmed that Dinning is
leaving the firm.
For the broader European markets, attention was fixed on Greece,
with the euro-zone finance ministers meeting in Brussels for a
third time to discuss a deal on a road map to debt sustainability
for the nation, a move necessary to release its next tranche of
bailout money. The Eurogroup also met last week with Greece on the
agenda but interrupted its meeting to "allow for further technical
work on some elements of this package."
"To reach debt sustainability, a cocktail of measures is on the
table, including lower interest rates on Greek debt, debt buybacks
and a compromise with the IMF to extend the target date for debt at
120% of GDP to 2022 from 2020," analysts at Société Générale
said in a note.
"While there is a good chance that an agreement is reached on
Monday, we consider it unlikely that this will make Greek public
finances sustainable on anything but paper. The hope is no doubt
that the Greek issue will not need to be revisited until after the
German election due in autumn 2013," they said.
The Athens General Index turned lower, off 0.7% to 839.47.
European investors also fixed their eyes on Spain, after
pro-independence parties in the region of Catalonia won a major
victory in Sunday's election.
Spain's IBEX 35 index dropped 0.7% to 7,854.00, with shares of
Banco Santander SA (SAN) losing 0.6%.
Banking shares were also on the decline in the U.K., as Royal
Bank of Scotland Group PLC (RBS) fell 3.1% and sector heavyweight
HSBC Holdings PLC lost 1.2%.
The FTSE 100 index gave up 0.7% to 5,780.95.
In France, shares of BNP Paribas SA dropped 1.2% and oil group
Total SA (TOT) shed 0.8% as crude-oil futures moved lower.
The CAC 40 index traded 0.9% lower at 3,498.80.
Germany's DAX 30 index lost 0.4% to 7,279.74. Shares of Deutsche
Bank AG (DB) fell 2.1%.
Outside the major indexes, shares of UBS AG (UBS) lost 1.2%. The
U.K. Financial Services Authority said it has fined the investment
bank 29.7 million pounds ($47.5 million) for systems and controls
that failed in relation to a $2.3 billion trading loss as a result
of unauthorized trading.
And shares of Swiss Re AG slumped 1.2%. The reinsurance firm
estimated its claims burden from Hurricane Sandy at about $900
million.
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