European shares slide on Greek bank losses

Eurostoxx 50:2,316.97 (–4.83) Frankfurt DAX:5,865.01 (+17.72) Paris CAC:3,153.52 (–7.95)

EUROPEAN STOCKS fell yesterday, snapping a four-day rally, as investors awaited the start of the US earnings season amid uncertainty that Slovakia will ratify the euro area’s revised bailout fund.

The benchmark Stoxx Europe 600 Index slipped 0.3 per cent to 235.28 at the close of trading.

The measure has fallen 19 per cent from this year’s peak in February amid speculation the European debt crisis will derail the economic recovery.

“Slovakia is causing some uncertainty,” said Witold Bahrke, a Copenhagen-based senior strategist at PFA Pension, which manages $45 billion.

“It seems the market is pricing in both a recapitalisation of banks as well as Germany and France having agreed on a larger haircut on Greek debt,” he said.

National benchmark indexes fell in 15 of the 18 western European markets.

Slovakia is due to vote on the euro area’s retooled bailout fund. The largest opposition party, which pledged to reject the motion, will back the European Financial Stability Facility in a second vote, if lawmakers fail to approve the motion today, Robert Fico, the group’s leader, said in Bratislava.

That would give the measure a majority. “There is likelihood that the bailout fund will eventually be approved this week, one way or the other,” Slovak finance minister Ivan Miklos said.

National Bank of Greece sank 16 per cent to €1.60 and EFG Eurobank Ergasias retreated 20 per cent to €56. Piraeus Bank tumbled 20 per cent to €25.4, while Alpha Bank dropped 19 per cent to €83.

ASML fell 3 per cent to €26.53 as ING Groep NV cut shares of Europe’s biggest semiconductor-equipment maker to “hold” from “buy”, citing recent outperformance ahead of tomorrow’s earnings report.

STMicroelectronics fell 4.1 per cent to €5.19.

Remy Cointreau added 3.1 per cent to 56.50.

Actelion, Switzerland’s largest biotechnology company, increased 5.1 per cent to 32.46.

Givaudan gained 2.6 per cent to 764 Swiss francs even after the maker of fragrances for Marc Jacobs’s Lola reported third-quarter sales that missed analysts’ estimates. – (Bloomberg)