Europe close: Stocks end mixed amid Monte dei Paschi fiasco
European stocks finished mixed in a tight range on Monday, as the world's oldest bank, Monte dei Paschi di Siena, looked to raise €5bn to stay afloat.
The benchmark Stoxx Europe 600 index was last down 0.13% to 359.55, while France's CAC 40 fell 0.23% to 4,822.08.
Italy’s FTSE MIB lost 0.24% to 18,968.94, while Germany’s DAX was up 0.1% at 11,406.33.
Beleaguered Italian lender Banca Monte dei Paschi di Siena was down 11.04% amid reports it had received binding offers for senior bridge loans which have been accepted, in order to raise €5bn to avoid a state bailout.
Connor Campbell, financial analyst at Spreadex, said: “The European indices are likely being capped by their banking stocks, which are all in various shades of red this Monday - that’s thanks to latest drama surrounding Monte dei Paschi.
“Italy’s oldest bank sparked another round of hand-wringing after being forced to turn to shareholders as it tries to raise €5bn to avoid a taxpayer bailout.
“This news was poorly received by investors, the stock falling 8.5% at the open to trigger a trading suspension and a general sense of unease among its banking peers.”
Meanwhile, oil prices were mixed, with West Texas Intermediate up 0.02% at $51.91 a barrel and Brent crude down 0.51% at $54.93.
As volumes began to taper off in the run-up to Christmas, a better-than-expected reading on German business confidence - which hit its highest level in nearly three years - failed to do much to lift the mood.
The German Ifo Institute's business climate index rose to 111.0 in December from 110.04 the previous month. This beat the 110.6 forecast.
The current assessment index increased to 116.6 from 115.6 in November, ahead of the 115.9 anticipated, while the expectations index nudged up to 105.6 in December from 105.5, versus expectations for it to remain flat.
Investors were also looking towards discussions between China and the US for the former to return a US underwater drone that was taken by a Chinese vessel in the South China Sea last Thursday.
In corporate news, 1.37% was shaved off Danone after the yoghurt maker said sales growth for 2016 will be slightly below its target due to weakness in the fresh dairy business in the fourth quarter.
Oil giant BP edged up 0.22% after signing an agreement to take a 10% stake in Abu Dhabi's ADCO onshore oil concession for an undisclosed sum.
BP also said on Monday that it will invest nearly $1bn in a natural gas field off the coast of West Africa as it struck a deal with Kosmos Energy.
Carnival shares slumped as Berenberg downgraded its stance on the stock to ‘hold’ from ‘buy’ and cut the price target to 4,000p from 4,200p.