Lenders drag down shares following tests
Published 02/08/2016 | 02:30
Lenders dragged down European equities amid investor scepticism even as stress-test results showed most of the firms would keep an adequate level of capital in a crisis.
By the close in Dublin, the ISEQ Overall Index was down 1.14pc, or 66.69 points, to end the Bank Holiday Monday trading at 5,800.95.
The laggards were led by Bank of Ireland, which tumbled 6.5pc in the wake of the stress tests. It was ranked fourth worst in the European-wide stress tests, which were released on Friday night.
Packaging giant Smurfit Kappa was down 1.7pc, while Irish Continental slipped 1.7pc to €4.64.
On the other side of the board, the leaders included drinks group C&C, which rose 1.8pc to €3.67, while insurance group FBD increased 1.1pc to €6.25.
Elsewhere, the Stoxx Europe 600 Index slipped 0.6pc, reversing an increase of as much as 0.6pc. Italy's Banca Monte dei Paschi di Siena, which jumped as much as 11pc as it said it's working on a plan involving private investors to help bolster its finances, erased almost all its gains by the end of the day.
UniCredit, the second-worst performer in the exam, sank 9.4pc. Britain's Barclays and Deutsche Bank, slid more than 1.8pc. Energy producers also weighed on the market amid losses in oil, with Royal Dutch Shell down 3.2pc.
"Investors are sceptical about everything these days," said Peter Garnry, head of equity strategy at Saxo Bank in Hellerup, Denmark.
"The problem with the stress tests is that they were too soft, only assuming a mild to moderate recession. This means that the data doesn't tell us much, and it's not too surprising that most banks passed."