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European stocks inch down, led by Banco Popular Español’s dive

Published: June 5, 2017 5:41 a.m. ET

Spanish bank may not find a buyer and have to be wound down



European stocks edged down Monday, as investors focused on an upcoming European Central Bank meeting and the political repercussions of London’s latest terror attack.

Shares in Banco Popular Español SA POP, -10.90% helped lead the way lower. The drop built on last week’s dive, which came on news the Spanish bank may not find a buyer and may have to be wound down.

The Stoxx Europe 600 SXXP, -0.18% fell 0.2% to 391.88. It was erasing part of last week’s 0.3% gain , which lifted the index to within 1% of its 2017 closing high achieved on May 10.

There has been no shortage of analysts recommending that investors buy European equities this year as the region’s economy and earnings prospects improve, giving the Stoxx 600 a year-to-date gain of 8.4%.

On Thursday, the ECB’s take on improving economic readings will get attention, but the central bank is not expected to announce any policy change.

“The language accompanying Thursday’s ECB decision will be telling,” said Ian Williams, a Peel Hunt strategist, in a note. “Recent eurozone activity data have been sufficiently robust to justify a withdrawal of the reference to ‘downside risks,’ despite the continued focus on sluggish core inflation measures.”

London attack: The U.K.’s FTSE 100 UKX, -0.30% was down 0.2% to 7,533.41, dropping into the red after initially edging up at the open.

The British equity benchmark and the pound GBPUSD, +0.0621% are expected to see choppy trading this week, following the attack in London that added uncertainty to the U.K. general election on Thursday.

Fresh opinion polls have indicated a tight contest.

On Saturday, attackers with a van mowed down pedestrians at London Bridge, then got out and began stabbing bystanders in nearby Borough Market. Police moved quickly and killed the attackers, but seven people died in the rampage and dozens were injured, 21 of them seriously.

Read: 5 things to know about the U.K.’s general election next week

And see: U.K. election—the worst, best and most-likely scenarios for stocks
London Attack Investigation Underway

Individual movers: Banco Popular Español’s stock was down 13% for the Stoxx 600’s biggest drop.

On the upside, Ocado Group PLC OCDO, +4.08% jumped 4.2% for the benchmark’s largest gain after the online grocer announced a deal with a regional European retailer who will use Ocado’s software platform. Analysts noted the customer’s name and other details haven’t been released yet.

“This is progress after a lot of promises, but it’s not exactly like doing a deal with Wal-Mart — yet,” said Neil Wilson, senior market analyst at ETX Capital, in a note.

Off the Stoxx 600, Sponda Oy SDA1V, +20.81% shares soared 21% after U.S. private equity firm Blackstone Group L.P. BX, +0.72% made a 1.76 billion euro ($1.98 billion) bid for the Finnish real estate company.

Other national indexes: France’s CAC 40 index PX1, -0.53% fell 0.5% to 5,315.26.

Traders in Germany had the day off for a holiday, after Germany’s DAX 30 DAX, +1.25% on Friday nabbed an all-time closing high.

Economic news: A eurozone final composite purchasing managers’ index was confirmed at 56.8 in May on Monday, and a May final services PMI was revised up to 56.3, up from a flash reading of 56.2.
http://www.marketwatch.com/story/european-stocks-inch-down-led-by-banco-popular-espanols-dive-2017-06-05?siteid=rss&rss=1