Investing.com – Euro zone shares closed mixed Tuesday, as Spanish and Italian government bond auctions resulted in higher borrowing costs for both countries, while worries over the debt management effectiveness of the upcoming European Summit further weighed on equities.
At the close of European trade, the EURO STOXX 50 slipped 0.12%, France’s CAC 40 gave back 0.30%, while Germany’s DAX 30 advanced 0.07%.
Spain’s Treasury auctioned EUR1.6 billion worth of three-month government bonds, slightly more that the targeted amount, at an average yield of 2.36%, up sharply from 0.84% in May. Spain also sold EUR1.48 billion of six-month debt at an average yield of 3.23%, up from 1.73% in May.
Following the auction, the yield on Spanish 10-year bonds rose to 6.71%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.
On Monday, Moody’s ratings agency downgraded 28 Spanish banks late Monday, citing exposure to the ailing real estate market. The decision came after Spain formally requested up to EUR100 billion in rescue loans to recapitalize its struggling banks.
Meanwhile, Italy’s Treasury sold EUR2.99 billion worth of two-year bonds at an average yield of 4.71%, the highest since December.
Financial stocks remained broadly higher, led by Italian lenders Intesa Sanpaolo and Unicredit, up 2.06% and 1.22%, and closely followed by France’s Societe Generale and BNP Paribas, with shares jumping 1.07% and 1.19% respectively.
Germany’s Deutsche Bank also held gains, as shares climbed 0.95%, while Commerzbank edged down 0.15%.
Meanwhile, Adecco, the world’s largest supplier of temporary workers, surged 4.50%, extending earlier gains, after the Swiss company said its buyback program will start in mid-July and be funded through debt.
Auto stocks remained on the downside however, as shares in BMW plunged 2.80% and Volkswagen tumbled 1.47%, while Daimler retreated 1.68%.
In London, commodity-heavy FTSE 100 rose 0.25%, boosted by gains in energy and mining stocks.
Mining giants Rio Tinto and Bhp Billiton saw shares rally 1.31% and 0.52%, while oil and gas majors BP and Anglo American jumped 1.54% and 1.23%.
Copper producer Xstrata erased gains however, with shares dropping 0.84%, as it was reportedly facing significant investor doubts about its proposed USD58 billion all-share merger with Glencore. Kazakhmys pushed higher, with shares surging 2.52%.
Elsewhere, Shire saw shares rally 2.12% after Societe Generale and Berenberg Bank upgraded their recommendations on the drug maker to buy from hold.
Meanwhile, financials stocks remained mixed, as shares in the Royal Bank of Scotland plunged 3.06% and Barclays dropped 0.45%, while Lloyds Banking retreated 0.36% and HSBC Holdings advanced 0.77%.
In the U.S., equity markets bucked the downtrend by moving higher on the session. The Dow traded up 0.16%, S&P 500 moved up 0.28, while the Nasdaq gained 0.35%.
Hurting U.S. shares, data indicated that U.S. consumer confidence declined more-than-expected in June, falling to the lowest level since January.
The Conference Board said its index of consumer confidence fell to 62.0 in June from a downwardly revised reading of 64.4 last month and disappointing expectations for a reading of 63.5.
However, in bullish news, a separate report showed that the Standard & Poor’s/Case-Shiller U.S. house price index fell at an annualized rate of 1.9% in April from a year earlier, better than expectations for a 2.5% drop.
U.S. home prices in March fell by an unrevised 2.6%.
Also Tuesday, a report showed that the forward looking Gfk index of German consumer climate eased up to 5.8 for July, confounding expectations for a decline to 5.6. The index posted a reading of 5.7 in June.
Investors are awaiting U.S. durable goods numbers, pending home sales and German cpi on Wednesday.
At the close of European trade, the EURO STOXX 50 slipped 0.12%, France’s CAC 40 gave back 0.30%, while Germany’s DAX 30 advanced 0.07%.
Spain’s Treasury auctioned EUR1.6 billion worth of three-month government bonds, slightly more that the targeted amount, at an average yield of 2.36%, up sharply from 0.84% in May. Spain also sold EUR1.48 billion of six-month debt at an average yield of 3.23%, up from 1.73% in May.
Following the auction, the yield on Spanish 10-year bonds rose to 6.71%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.
On Monday, Moody’s ratings agency downgraded 28 Spanish banks late Monday, citing exposure to the ailing real estate market. The decision came after Spain formally requested up to EUR100 billion in rescue loans to recapitalize its struggling banks.
Meanwhile, Italy’s Treasury sold EUR2.99 billion worth of two-year bonds at an average yield of 4.71%, the highest since December.
Financial stocks remained broadly higher, led by Italian lenders Intesa Sanpaolo and Unicredit, up 2.06% and 1.22%, and closely followed by France’s Societe Generale and BNP Paribas, with shares jumping 1.07% and 1.19% respectively.
Germany’s Deutsche Bank also held gains, as shares climbed 0.95%, while Commerzbank edged down 0.15%.
Meanwhile, Adecco, the world’s largest supplier of temporary workers, surged 4.50%, extending earlier gains, after the Swiss company said its buyback program will start in mid-July and be funded through debt.
Auto stocks remained on the downside however, as shares in BMW plunged 2.80% and Volkswagen tumbled 1.47%, while Daimler retreated 1.68%.
In London, commodity-heavy FTSE 100 rose 0.25%, boosted by gains in energy and mining stocks.
Mining giants Rio Tinto and Bhp Billiton saw shares rally 1.31% and 0.52%, while oil and gas majors BP and Anglo American jumped 1.54% and 1.23%.
Copper producer Xstrata erased gains however, with shares dropping 0.84%, as it was reportedly facing significant investor doubts about its proposed USD58 billion all-share merger with Glencore. Kazakhmys pushed higher, with shares surging 2.52%.
Elsewhere, Shire saw shares rally 2.12% after Societe Generale and Berenberg Bank upgraded their recommendations on the drug maker to buy from hold.
Meanwhile, financials stocks remained mixed, as shares in the Royal Bank of Scotland plunged 3.06% and Barclays dropped 0.45%, while Lloyds Banking retreated 0.36% and HSBC Holdings advanced 0.77%.
In the U.S., equity markets bucked the downtrend by moving higher on the session. The Dow traded up 0.16%, S&P 500 moved up 0.28, while the Nasdaq gained 0.35%.
Hurting U.S. shares, data indicated that U.S. consumer confidence declined more-than-expected in June, falling to the lowest level since January.
The Conference Board said its index of consumer confidence fell to 62.0 in June from a downwardly revised reading of 64.4 last month and disappointing expectations for a reading of 63.5.
However, in bullish news, a separate report showed that the Standard & Poor’s/Case-Shiller U.S. house price index fell at an annualized rate of 1.9% in April from a year earlier, better than expectations for a 2.5% drop.
U.S. home prices in March fell by an unrevised 2.6%.
Also Tuesday, a report showed that the forward looking Gfk index of German consumer climate eased up to 5.8 for July, confounding expectations for a decline to 5.6. The index posted a reading of 5.7 in June.
Investors are awaiting U.S. durable goods numbers, pending home sales and German cpi on Wednesday.