UPDATE 2-More pressure on banks keeps European shares sluggish

  • Reuters
  • Stock Market News
UPDATE 2-More pressure on banks keeps European shares sluggish
Credit: © Reuters.

* STOXX 600 flat

* Euro zone banks down for sixth day

* Wirecard bounces back (Recasts, adds details, closing prices)

By Danilo Masoni and Julien Ponthus

MILAN/LONDON, Feb 4 (Reuters) - European shares were flat on Monday as the heavyweight banking sector fell further following poor results from Julius Baer and as optimism fueled by strong U.S. economic data faded.

The pan-European STOXX 600 .STOXX index added 0.1 percent after being lifted on Friday by upbeat U.S. jobs data which helped eased worries over the health of the global economy.

Euro zone stocks .STOXXE fell 0.1 percent, while the UK's FTSE 100 .FTSE rose 0.2 percent, helped by a weaker pound.

Banks were the biggest drag to the STOXX 600 with Julius Baer BAER.S falling more than 4 percent after a tough end to 2018 caused the Swiss private bank to scale back growth targets.

Julius Baer said it would cut around 2 percent of its staff as part of a 100 million Swiss franc cost saving plan. have lagged the early 2019 stock market bounce on concerns over a slowing economy, with central banks signaling a pause in tightening measures also hitting the rate-sensitive sector.

"With the ECB still in rate assessment mode and the Fed signaling pause, European banks remain hostage to central banks' dovish stances," said JP Morgan Cazenove analysts.

"The fourth quarter of 2018 has been disappointing so far, leading to 3-5 percent EPS cuts... and hence short-term share price risk needs to be 'flushed out' first," they added.

The euro zone bank .SX7E , down 1.2 percent on the day, fell for the sixth straight session, suffering their longest losing streak since October 2018.

Spanish banks Sabadell SABE.MC and Caixabank CABK.MC were among the biggest losers, down 4.8 and 4.5 percent respectively, following a price target downgrade from UBS.

German payment company Wirecard WDIG.DE soared 13.7 percent after it said its law firm found no conclusive evidence of criminal misconduct. The Financial Times last week alleged financial wrongdoing at its Singapore office, sending its shares down as much as 40 percent. FXPO.L dropped 7.9 percent after the iron ore pellet producer said an ongoing review of statements of a charitable foundation in Ukraine to which it made donations may affect its books. DSV DSV.CO fell 2.1 percent after its bid for Panalpina PWTN.S hit a road block when the Swiss freight forwarder's top shareholder rejected the offer. tumbled 11.7 percent.

Pan-European stock market operator Euronext ENX.PA fell 0.5 percent after saying it may sweeten its offer for Oslo Bors VPS OSLO.NFF as Nasdaq NDAQ.O made a rival bid.

Ryanair RYA.I fell 1.9 percent after the Irish budget airline reported a 20 million-euro loss in the third quarter, its first since 2014. news is set to intensify throughout the week with trading updates on Wednesday and Thursday, notably from BNP Paribas BNPP.PA and ING INGA.AS among banks and Sanofi SASY.PA and GlaxoSmithKline GSK.L for pharmaceuticals.

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