Eurostoxx 50: 2,275.92 (–15.55) Frankfurt DAX: 5,928.66 (–37.48) Paris CAC: 3,101.60 (–19.95)EUROPEAN STOCKS dropped yesterday, extending last week's sell-off, as Italian prime minister Silvio Berlusconi struggled to hold power before a budget vote and Greece worked on plans to form a new government.
“There is an enormous amount of uncertainty around how this crisis is going to play out,” Robert Talbut, chief investment officer at Royal London Asset Management, said.
In Italy, Mr Berlusconi’s majority is unravelling before a key parliamentary vote today on the 2010 budget report as contagion from Europe’s sovereign debt crisis pushed the country’s borrowing costs to euro-era records.
The yield on Italy’s 10-year bonds surged to 6.68 per cent.
Stocks pared losses as Mr Berlusconi’s former spokesman Giuliano Ferrara said the Italian premier is likely to decide on his political future “within hours”, with his formal resignation coming next week after he secures parliamentary approval of austerity and economic-growth measures.
Reports of his resignation were "totally unfounded", Mr Berlusconi said in an interview with newspaper Libero.
Carrefour dropped 2.6 per cent to €19.16 as Citigroup lowered its recommendation for the world’s second-biggest retailer to “sell” from “neutral”.
Metro slid 2.1 per cent to €34.89, while Hennes & Mauritz fell 1.1 per cent to 209.30 kronor in Stockholm.
PostNL retreated 7.4 per cent to €2.95 after the company said third-quarter operating profit fell 22 per cent as domestic mail deliveries fell.
Sandvik lost 3.2 per cent to 86.55 kronor after the world’s largest maker of metal-cutting tools offered 6.19 billion kronor ($933 million) to buy the remaining shares of its subsidiary Seco Tools. Seco rose 27 per cent to 103.30 kronor.
Greek banks limited losses in the Stoxx 600. National Bank of Greece advanced 5.4 per cent to €1.94, Piraeus Bank increased 4.6 per cent to 25 cent and Alpha Bank gained 6.9 per cent to €1.09.
Bayer rose 2.5 per cent to €46.03 after its blood thinner Xarelto won approval in the US to prevent strokes in people with atrial fibrillation, an irregular heartbeat. – (Bloomberg)
