Spanish equities fell on Monday, undermined by the country’s banking sector as Bankia dropped sharply following its bailout request.
Shares in the lender had been suspended on Friday after Bankia asked the Spanish government for a €19bn bailout. As trading in the shares resumed on Monday, the price fell nearly 30 per cent just minutes after the open. By the close, having received backing for the bailout by the prime minister, the shares recovered some ground, but remained down 13.1 per cent at €1.37.
The stock received several downgrades, including from Nomura which cut its price target to €0.20 from €1.10 and warned of the impact on the rest of the Spanish banking system.
“We believe that only BBVA, Santander and Sabadell would avoid needing to strengthen capital and remain negative in our outlook for Spanish banks,” said analyst Daragh Quinn.
Other big fallers in the bank sector included Banco Popular, which fell 7.1 per cent to €1.72, while Bankinter lost 4.1 per cent to €2.82 and Caixabank shed 5 per cent to €2.17.
Overall, the Ibex 35 index fell 2.2 per cent to 6,401.2.
In contrast, Greece’s Athens General jumped 6.9 per cent to 518.49 as pro-bailout parties were reported to have edged ahead of anti-austerity groups in the latest polls. Banks were among the top gainers.
There were some hard-won gains elsewhere, too. Finland’s Nokia, the mobile phone maker, was on the FTSE Eurofirst 300 leaderboard all day, climbing 3.3 per cent to €2.25, but was unable to help the pan-European benchmark index cling on to positive territory. The Eurofirst fell 0.1 per cent to 984.01.
SolarWorld, the German solar power group, rose 6.2 per cent to €1.54 as investors welcomed news of a landmark in solar energy production in Germany.
The head of the country’s renewable energy watchdog said that solar plants across the country produced a record total of 22 gigawatts of electricity per hour through the midday hours of Friday and Saturday. This was equal to the energy produced by 20 nuclear reactors running at full capacity.
The news came as a boost to the industry following a spate of insolvencies this year as solar-panel makers have been hit by reduced government aid and increased competition.
Germany’s Xetra Dax index eased 0.3 per cent to 6,323.19 and France’s CAC 40 slipped 0.2 per cent 3,041.23.
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