Italian Banks Lead Losses as European Stocks Halt 3-Week Rally

EghtesadOnline: Declines in lenders and energy producers dragged European stocks down from a one-month high.

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28 November 2016

UniCredit SpA and Banca Monte dei Paschi di Siena SpA tumbled more than 4 percent after the Financial Times reported, citing unnamed officials, that as many as eight Italian banks risk failing if the country’s prime minister loses a constitutional referendum this weekend. That sent the FTSE MIB Index to the worst performance among developed-market benchmarks, down 2 percent.

Also weighing on equities today is investor skepticism about OPEC’s ability to reach a deal to cut output at a Nov. 30 meeting -- Total SA and BP Plc fell more than 1 percent as oil slid below $46 a barrel. The Stoxx Europe 600 Index slid 0.9 percent at 9:01 a.m. in London, as more than 520 of its stocks dropped, Bloomberg reported.

Europe’s equity gauge is declining after rebounding 4.2 percent from a Nov. 4 low amid speculation that Donald Trump’s U.S. election win will lead to increased fiscal spending. Banks, miners and other industries seen benefiting from stronger economic growth led gains, while utilities have lagged.

After the U.K.’s vote to leave the European Union and Trump’s unexpected win, investors are on edge about the outcome of Italy’s Dec. 4 vote on constitutional reform. A gauge of Italian lenders on Monday headed for its lowest level in more than three months, taking its 2016 slump to 52 percent. Spanish banks also slid, with Banco Popular Espanol SA and Banco de Sabadell SA down 2.3 percent or more.

Among other stocks active today:

Royal Bank of Scotland Group Plc lost 2.8 percent on a report that it may struggle to sell all of its Williams & Glyn unit.

Aryzta AG declined 1 percent after the Swiss maker of frozen convenience meals said quarterly revenue fell, driven by lower sales in North America.

Aberdeen Asset Management Plc added 1.5 percent after saying clients pulled less money out of its funds in the fourth quarter.