European shares opened slightly lower on Thursday as miners fell and Italian banks and Credit Suisse led banking shares lower.
The pan-European STOXX 600 index was down 0.3 per cent. Volumes were subdued during the last few days of the year.
Banking stocks were among the top fallers, led lower by Italian merger partners Banco Popolare and Banca Popolare di Milano, which both fell more than 2 per cent.
Shares in fellow Italian lender Monte dei Paschi were suspended once again, and Italy’s economy minister said the actual amount for the government’s recapitalisation of the bank would depend on the lender’s new industrial plan, in an interview to Italy’s daily Il Sole 24 Ore.
“The banks have really been the ultimate pain trade for professional fund managers in the second half of the year, and it’s all been very much part of this switch from expensive defensives and quality growth to cyclicals,” Russ Mould, investment director at AJ Bell, said.
“Because they’re very difficult companies to understand and you had the Deutsche Bank flap in the autumn, you’ve got the ongoing Italian situation, lots of fund managers are still fighting shy of them, but they did brilliantly in the second half of the year.”
Credit Suisse was down 2.1 per cent after a media report saying the U.S. Securities and Exchange Commission is investigating the sale of $850 million (£692.58 million) in bonds issued by Mozambique by Credit Suisse, Russia’s VTB Group and BNP Paribas, which was down 1 per cent.
While the broader European basic resources index declined, precious metals miners Polymetal International , Randgold Resources and Fresnillo were the top gainers on the STOXX 600, up between 1.9 per cent and 2.6 per cent as the price of gold found support from a declining U.S. dollar.
The STOXX 600 index is set to post a loss of 1.4 per cent for 2016, while France’s CAC, Germany’s DAX and Britain’s FTSE 100 indexes are all on course to end the year with a gain.