European stocks higher

[Raam]

European stocks opens higher


Euro Stoxx +0.61%

FTSE 100 +0.92%

CAC 40 +0.73%

DAX +1.15%

[Yousuf Ali]

The European stocks had a negative start to a brand new week, now extending losses amid resurgence of concerns over Italian banking sector crisis, in wake of next month’s Italian referendum. Markets fret over multiple bank failures if the Italian PM Renzi loses the upcoming referendum, which continues to dampen investors’ confidence.
The crisis hit Italian bank, monte paschi, halted trading after falling 7.5% in Milan trade while the overall Italian banking index was down 3% so far, meandering near eight-week lows.
Further, rising concerns where OPEC will be able to reach the oil output deal on Wednesday at its meeting in Vienna dragged the region indices, especially the commodity-heavy FTSE 100 index.

[Yousuf Ali]

The European court of justice ruled that Spanish banks that over charged for mortgages must offer compensation.
This was a blow to Spanish banks, which fell in response to the final ruling. The preliminary ruling allowed a time-limit to claims for reimbursement, but the final court ruling disallowed the constraint. All Spanish banks are not equally affected and some banks have put aside some of funds. Still financials is the worst performing sector in Spain today. They are off nearly 1.75% in late morning turnover, while the Spanish market as a whole is off about 0.75%.
Meanwhile, Italian banks are under modest pressure. The index of Italian banks is off 0.6% and is the sixth declining session of the past nine. After the cabinet approved increasing the country debt by 20 bln euro to help the banks, both chambers of parliament will vote on measures today. For reasons that seem to stem more from politics that economics, Italy has been slow to address its banking system woes, and when it does move, it tends to do too little. There is no shock and awe or even a pretense of getting ahead of the curve of expectations.