© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: October 4, 2011 7:22 pm
A profit warning from Deutsche Bank and a near-40 per cent slump in shares in Dexia drove European financials sharply down on Tuesday, as the FTSE Eurofirst 300 fell for a third consecutive session.
Deutsche Bank slipped 4.3 per cent to €24.64 at the close – and at one point was trading nearly 8 per cent down – after the German lender’s exposure to the Greek economy forced it to abandon its profit targets. The company said it would write down a further €250m of Greek debt holdings in its third-quarter results, but added that it would still post a “robust earnings level” for the full year.
Belgium’s Dexia pared an early slump to close down 22.5 per cent at €1.01, having lost 37.7 per cent after its board considered breaking up the bank. A joint statement by French and Belgian officials, pledging to guarantee the Brussels-based group’s loans, somewhat improved market sentiment.
Other heavy losers included France’s Natixis , down 9.4 per cent to €2.10, and Italy’s Intesa Sanpaolo , which fell 6.2 per cent to €1.11. Austria’s Raiffeisen International added to Monday’s 7.9 per cent loss, shedding another 4.5 per cent to €19.48.
UBS , however, outperformed its European peers after announcing that it expected to post a modest third-quarter profit, despite a 2.3bn trading scandal which led to the resignation of its chief executive. The Swiss lender climbed 1.4 per cent to SFr10.23.
The Eurofirst closed down 2.7 per cent to 887.77, having dropped as much as 3.9 per cent during the session.
It was another grim day for Europe’s car makers, several of which had their price targets cut by Royal Bank of Scotland. Among these, Germany’s BMW fell a further 4.4 per cent to €45.04 after hitting a 52-week low on Monday, while France’s Renault tumbled 8.2 per cent to €22.34 and Milan-listed Fiat shed 7.5 per cent to €3.67.
Elsewhere, Deutsche Bank downgraded RHI from “buy” to “hold”. The Austrian manufacturer of fireproof materials shed 4.6 per cent to €14.25.
“Against a mix of economic weakening and political uncertainty, we assume that end customer demand for RHI is likely to start deteriorating by year end 2011,” said analyst Christian Bader.
Vossloh , the German manufacturer of technology for transport, slumped 11.9 per cent to €63.36 after Standard & Poor’s reiterated a “sell” recommendation on the company, citing “persisted problems with call-offs and delays relating to railway infrastructure in China and Russia”.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in