Banks drag down European markets

European stocks fell yesterday as banks dragged the Stoxx Europe 600 Index lower and Nato said Russia had sent troops and heavy weapons into Ukraine.

Banks slipped as US, Swiss, and British regulators fined lenders including HSBC Holdings, Royal Bank of Scotland Group and UBS to settle a probe into foreign-exchange manipulation.

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

Ireland’s 10-year bonds rose for a fifth day, pushing yields to a record low, amid speculation the euro area’s fastest-growing economy will benefit from monetary stimulus aimed at boosting the region as a whole.

Ireland's 10-year bond yield declined two basis points, or 0.02 percentage point, to 1.60 per cent at 4.15pm yesterday after earlier touching 1.577 per cent, the lowest since Bloomberg began compiling the data in 1991.

DUBLIN

The Iseq Overall Index fell by just under 1 per cent to 4,785.76. It was another bad day for Irish-owned insurer

FBD

, which closed down 4.7 per cent at €11.25. The company issued its second profit warning of the year on Tuesday due to increased costs relating to legacy claims.

Tullow Oil closed down 0.13 per cent at €6.191 after announcing it will slash capital expenditure next year and focus on onshore exploration in East Africa and developing existing finds in Ghana.The company intends to cut its exploration and appraisal budget next year to $300 million (€241 million) from $1 billion.

Bank of Ireland fell 3.7 per cent to 28.8 cent. It was affected by negative sentiment towards banks across Europe as a number of big players were hit with fines by regulators.

Cavan-based building products company Kingspan closed down 1.1 per cent at €12.515. On Tuesday, it said it had entered into an agreement to acquire the building products division of Vicwest Inc,a Canadian listed company. Building materials group CRH and bookmaker Paddy Power both fell by more than 1 per cent.

LONDON

UK stocks fell, halting a five-day advance for the FTSE 100 Index, led by declines in Capita and Aberdeen Asset Management. Capita retreated 6.5 per cent after saying its finance director will step down.

Aberdeen retreated 4.3 per cent after Barclays downgraded the shares. J Sainsbury fell 1.1 per cent after saying price cuts will weigh on second-half profit. Tesco fell 1.8 per cent.

Barclays fell 2.2 per cent to 228.9 pence. The British lender said it’s not ready to reach an agreement with regulators related to the currency-rigging investigation.

G4S Plc rose 2.1 per cent after reporting higher organic revenue growth in the nine-month fiscal period.

The FTSE 100 slipped 16.36 points, or 0.3 per cent, to 6,611.04 at the close of trading. The broader FTSE All-Share Index lost 0.2 per cent.

EUROPE

The Stoxx 600 retreated 1.1 per cent to 335.09 at the close of trading. Nato accused Russia of sending columns of troops and heavy weapons into Ukraine in the past two days, as the government in Kiev warned the nation’s eastern combat zone is close to returning to open war.

A gauge of Stoxx 600 lenders contributed the most to the index’s decline. Italian and Greek banks lost the most. A measure of utility-related stocks fell the most of the 19 industry groups on the Stoxx 600.

NEW YORK

US stocks fluctuated near all-time highs in early trading, trimming earlier losses on concern slowing growth in Europe will hurt the economy. Gains among phone and consumer stocks offset losses in utilities.

Exelon led utility shares in the S&P 500 lower as the US and China agreed on new carbon cuts to fight climate change. Bank shares slumped 0.8 per cent after regulators in Europe and the US fined six lenders to settle a probe into the rigging of foreign-exchange benchmarks. – (Additional reporting by Bloomberg)