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European stocks higher in thin holiday trade

by Jonathan Adams

Stocks in Frankfurt and Paris rose slightly in thin trading early Tuesday, as the FTSE in London remained shut over the Christmas holiday period.

By 0940 GMT, Frankfurt’s DAX 30 edged up 0.15 per cent to 11,466.58, while the CAC 40 in Paris added 0.14 per cent to 4, 84.41 in opening deals.

European investors were nervously eyeing the latest developments in Italy after troubled lender Banco Monte dei Paschi di Siena (BMPS) said the European Central Bank had called for it to receive a bailout of 8.8 billion euros (£7.50 billion).

The ECB’s reported need for recapitalisation at BMPS is over three billion euros more than previously judged necessary.

“The news of the day is about Banco Monte dei Paschi di Siena,” Daniel Larrouturou at Diamant Bleu Gestion in Paris told AFP.

He said the higher bailout sum could “weigh heavily on BMPS, whose shares are currently suspended, and possibly on the banking sector”.

Italy on Friday approved a state-funded rescue of Tuscan lender BMPS without citing a specific figure. The move however is fraught with political and economic complications for a centre-left government preparing for an election in the next 15 months.

Later on Tuesday, investors’ attention will turn to the United States, where the latest reports on house prices and consumer confidence is due to be released.

The FTSE 100 in London will reopen on Wednesday after being shut for two days because of public holidays.

This article is for information purposes only.
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