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Concerns ease in Europe, but shares still decline

After the previous day’s euphoria, low trading volume and profit taking ensured European equity indices ended the day broadly lower. The losses came despite what were largely considered to be robust bond auctions from France and Spain earlier in the day, markets had previously expected them to suffer from a lack of demand.

Stocks had spent much of the day in positive territory, mirroring further gains in the US and Asia after Europe’s previous session had closed. But they were unable to maintain momentum, even after US manufacturing data suggested output was at a five month high and greatly above analyst expectations.

As the FTSE 100 closed 16 points lower at 5490, shares in Resolution topped the leader board in the UK, gaining 3.9% with a 9.1p rise to 244.7p, mainly after missing out on the aggressive gains seen during the previous day. After posting particularly large advances the previous day it was no surprise that the banking and mining sectors saw the greatest losses, Barclays and Lloyds amongst the worst hit.

In treasury markets the successful Spanish bond auction saw the yield on its 10 year bonds fall a dramatic 50 basis points from 6.1% to 5.6%, whilst those in Italy fell from just under 7% to 6.6%.

A poor day was had by commodity investors, as prices of precious metals, oil, industrial metals and agricultural commodities all falling back. Silver and platinum being the only exceptions as both made small gains.

This was posted in Bdaily's Members' News section by John Dance .