European stocks slipped Friday, with markets spooked by news of $2 billion in trading losses at U.S. banking large J.P. Morgan Chase JPM +0.25% & Co., prompting investors to chop exposure to equities, notably banking stocks.
The benchmark Stoxx Europe 600 Index was recently zero.7% lower at 249.47. The U.K.'s FTSE a hundred Index was down zero.5% at 5515.23, Germany's DAX fell zero.4% to 6494.34 and France's CAC forty Index decreased by one.0% to 3100.22. within the euro-zone 'periphery,' Spain's IBEX-35 index fell one.7% to 6928.33, whereas Greece' ASE Composite lost one.9% to 628.50.
The Stoxx Europe 600 banking index slumped two hundredth to 131.87.
Late Thursday, J.P. Morgan's chief govt said in a very hastily organized post-close conference decision that the bank booked $2 billion in trading losses within the past six weeks and will face a further $1 billion in second-quarter losses as a result of market volatility. The losses stemmed from derivatives bets gone wrong within the bank's Chief Investment workplace, a part of the company branch of the bank that manages risk for the corporate.
CEO James Dimon has over the past few years attributed the bank's comparatively successful performance through the credit crisis partially to risk management, said Vivek Raja, an analyst at Oriel Securities. "This event can raise doubtless uncomfortable questions about J.P. Morgan's internal risk controls," Raja added.
Analyst Richard Ramsden at Goldman Sachs added that whereas overall the second-quarter loss seems manageable at J.P. Morgan, "the broader implications center on risk management practices and therefore the difficult atmosphere, that continues to pressure operating results." Goldman reduced its target worth on J.P. Morgan to $48 on the news however retained a purchase recommendation on the stock.
Market confidence was more hit when French bank Crédit Agricole ACA.FR -2.75% posted a seventy fifth drop in first-quarter profit, citing its significant exposure to Greece and therefore the sovereign debt crisis.
The J.P. Morgan chase news additionally overshadowed developments in Greece, where hopes of a Greek coalition government willing to stay to austerity pledges and hints at some style of flexibility on the euro-zone government facet have boosted sentiment, said Crédit Agricole. But, "as the negotiation in forming a Greek coalition government is constant and political uncertainty remains elevated, investors can possible to remain cautious," it added.
Caution additionally persists before the Spanish government's announcement on a cleanup of its banking sector due Friday, with media reports speculating that banks may well be forced to ramp up their provisions on property loans to a spread of twenty fifth to half-hour from seven-membered previously. Deutsche Bank strategist Jim Reid additionally noted say the creation of an asset protection theme or structures to ring-fence dangerous loans from the remainder. "While it definitely may be a smart set up the vital question is that the supply of funding to recapitalize the world and whether or not it'll go so much enough," said Reid.
In the currency markets, the euro was very little modified against the dollar recently at $1.2935 from $1.2936 late Thursday in ny, whereas the dollar was at ¥79.87 from ¥79.93.
In alternative markets, June Nymex crude was down $1.03 at $96.05 a barrel, whereas June Brent crude oil futures were down $0.92 at $111.81 a barrel. Spot gold was down $18.00 at $1578.50 a troy ounce. The June bund contract was 9 ticks higher at 142.70.
Source : http://online.wsj.com
The benchmark Stoxx Europe 600 Index was recently zero.7% lower at 249.47. The U.K.'s FTSE a hundred Index was down zero.5% at 5515.23, Germany's DAX fell zero.4% to 6494.34 and France's CAC forty Index decreased by one.0% to 3100.22. within the euro-zone 'periphery,' Spain's IBEX-35 index fell one.7% to 6928.33, whereas Greece' ASE Composite lost one.9% to 628.50.
The Stoxx Europe 600 banking index slumped two hundredth to 131.87.
Late Thursday, J.P. Morgan's chief govt said in a very hastily organized post-close conference decision that the bank booked $2 billion in trading losses within the past six weeks and will face a further $1 billion in second-quarter losses as a result of market volatility. The losses stemmed from derivatives bets gone wrong within the bank's Chief Investment workplace, a part of the company branch of the bank that manages risk for the corporate.
CEO James Dimon has over the past few years attributed the bank's comparatively successful performance through the credit crisis partially to risk management, said Vivek Raja, an analyst at Oriel Securities. "This event can raise doubtless uncomfortable questions about J.P. Morgan's internal risk controls," Raja added.
Analyst Richard Ramsden at Goldman Sachs added that whereas overall the second-quarter loss seems manageable at J.P. Morgan, "the broader implications center on risk management practices and therefore the difficult atmosphere, that continues to pressure operating results." Goldman reduced its target worth on J.P. Morgan to $48 on the news however retained a purchase recommendation on the stock.
Market confidence was more hit when French bank Crédit Agricole ACA.FR -2.75% posted a seventy fifth drop in first-quarter profit, citing its significant exposure to Greece and therefore the sovereign debt crisis.
The J.P. Morgan chase news additionally overshadowed developments in Greece, where hopes of a Greek coalition government willing to stay to austerity pledges and hints at some style of flexibility on the euro-zone government facet have boosted sentiment, said Crédit Agricole. But, "as the negotiation in forming a Greek coalition government is constant and political uncertainty remains elevated, investors can possible to remain cautious," it added.
Caution additionally persists before the Spanish government's announcement on a cleanup of its banking sector due Friday, with media reports speculating that banks may well be forced to ramp up their provisions on property loans to a spread of twenty fifth to half-hour from seven-membered previously. Deutsche Bank strategist Jim Reid additionally noted say the creation of an asset protection theme or structures to ring-fence dangerous loans from the remainder. "While it definitely may be a smart set up the vital question is that the supply of funding to recapitalize the world and whether or not it'll go so much enough," said Reid.
In the currency markets, the euro was very little modified against the dollar recently at $1.2935 from $1.2936 late Thursday in ny, whereas the dollar was at ¥79.87 from ¥79.93.
In alternative markets, June Nymex crude was down $1.03 at $96.05 a barrel, whereas June Brent crude oil futures were down $0.92 at $111.81 a barrel. Spot gold was down $18.00 at $1578.50 a troy ounce. The June bund contract was 9 ticks higher at 142.70.
Source : http://online.wsj.com
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