Europe midday: Swatch bemoans dog's breakfast at Tiffany's
European prices have have stabilised lower levels, as investors await developments on the latest Eurozone crisis.
The resignation on Friday of European Central Bank (ECB) official Juergen Stark brought the Eurozone crisis into focus. Stark, like many of his German compatriots, is said to be unhappy about the ECB’s policy of buying bonds of troubled eurozone countries such as Spain and Italy.
Greece's Prime Minister, George Papandreou, approved new measures yesterday designed to fill a hole in the country's budget.
The DAX is off 153 points at 5,035 and the CAC is down 125 at 2,849.
Not surprisingly, banks are bearing the brunt of the sell-off, with French lenders - the most heavily exposed to Greek debt - suffering double digit percentage falls. Ratings agency Moody's is thought to be contemplating cutting the credit ratings of BNP Paribas, Societe Generale (SocGen) and Credit Agricole. French insurance giant AXA is also dragged down, as is investment bank and asset manager Natixis.
SocGen reacted to concerns about the "uncertain and sometimes irrational environment" by wheeling out the bank's chairman and chief executive officer, Frederic Oudea, to reassure the market. The bank's exposure to sovereign debt in Greece, Italy, Ireland, Portugal and Spain was €4.3bn, as at last Friday, a figure that represents less than 1% of the group's consolidated balance sheet.
Oudea said the bank would speed up its programme of disposals of legacy assets and would ""scale down businesses adversely affected by regulation or low-cross-selling potential."
In Germany, lenders Commerzbank and Deutsche Bank are the worst performing blue-chips, with declines barely less severe than those suffered by their French counterparts. Elsewhere, Spain's BBVA and Italy's UniCredit are being given the cold shoulder by investors.
Corporate news is thin on the ground. Swiss watchmaker Swatch has called time on Tiffany Watch, its partnership with famous US jeweller Tiffany, citing Tiffany's "systematic efforts to block and delay development of the business." Swatch intends to file for damages against the US luxury jeweller.
There has also been a falling out between Japan's Suzuki Motor Corporation and German car maker Volkswagen (VW), with Suzuki reportedly set on dissolving the fruitless 20-month alliance.
Suzuki, which owns 1.5% if VW, will sell the shares in the German firm if VW agrees to end their tie-up. VW, which owns around 20% of Suzuki, intends to keep its stake in the Japanese vehicle maker, according to a statement from a company spokesman.
CAC 40 - Risers
CAC 40 - Fallers
BNP Paribas (BNP) € 25.48 -14.51%
AXA (CS) € 8.45 -10.08%
Societe Generale (GLE) € 15.72 -9.89%
Credit Agricole (ACA) € 4.89 -9.44%
Saint Gobain (SGO) € 28.60 -5.84%
Alcatel-Lucent (ALU) € 2.19 -5.69%
Natixis SA (KN) € 2.27 -5.65%
Vinci (DG) € 30.90 -5.26%
Alstom (ALO) € 26.09 -5.23%
Lafarge (LG) € 24.17 -5.22%