May 28 (Bloomberg) -- European stocks were little changed, following last week’s rally for the region’s equity benchmark, as a selloff in banks offset Greek opinion polls that eased concern the country will leave the euro.
Bankia SA sank 13 percent after the lender said it will seek 19 billion euros ($24 billion) of state funds and Spanish borrowing costs surged. Mining companies limited losses, led by Rio Tinto Group and Antofagasta Plc, as copper climbed amid dwindling stockpiles in China.
The Stoxx Europe 600 Index slipped less than 0.1 percent to 242.47 at the close in London. Markets in Denmark, Iceland, Luxembourg, Austria, Norway and Switzerland were closed for a public holiday today, while U.S. exchanges were shut for Memorial Day.
“Investor sentiment is very cautious and there is likely to be a lot of volatility with the Greek elections looming over the market,” said Keith Bowman, an equity analyst at Hargreaves Lansdown Plc in London. “A lot of people are sitting on the sidelines where they can and are waiting for a bit more certainty.”
European stocks posted their first weekly gain of the month last week as China pledged to bolster growth and a three-week selloff left the Stoxx 600 at its cheapest valuation since January. The gauge has still slumped 11 percent from this year’s high on March 16 amid concern Greece will fail to implement the measures required to stay in the euro.
Greek Opinion Polls
Greece’s New Democracy, which supports the spending cuts and tax increases imposed by the European Union, came first in all six opinion polls published on May 26 as campaigning continued for the general election on June 17.
Party leader Antonis Samaras said Greece’s departure from the euro would cause incomes, bank deposits and property values to lose at least half their value within days, while food prices would rise by a quarter.
International Monetary Fund Managing Director Christine Lagarde upbraided Greek taxpayers and Juergen Fitschen, the incoming co-chief executive officer of Deutsche Bank AG, referred to the country as a “failed state.”
In Ireland, supporters of the EU’s fiscal pact maintained their lead before the 31 May referendum. Four polls over the weekend gave the yes campaign an average lead of 17.5 percentage points, when undecideds are excluded.
National benchmark indexes declined in 7 of the 12 western-European markets that opened today. The U.K.’s FTSE 100 gained 0.1 percent, Germany’s DAX dropped 0.3 percent and France’s CAC 40 decreased 0.2 percent.
Spain’s IBEX 35 Index sank 2.2 percent as bonds retreated, pushing 10-year yields to their highest relative to benchmark German bunds since the euro was created.
Bankia Shares Plunge
Bankia, the lender that Spain nationalized this month, tumbled 13 percent to 1.36 euros after the group said it will seek state funds as it set aside provisions for residential mortgages and lending to companies.
The group took provisions of 5.5 billion euros for non-real estate lending after stress-testing the loans, Director General Jose Sevilla told reporters in Madrid on May 26. It also reclassified 300 million euros of lending, that it had booked as loans to small- and medium-sized companies, as lending to property developers, Chairman Jose Ignacio Goirigolzarri said.
Standard & Poor’s cut the credit ratings of Bankia, Banco Popular Espanol SA and Bankinter SA to junk on May 25, citing Spain’s weakening economy. The rating company downgraded 11 Spanish banks on April 30.
Banco Popular, Bankinter
Banco Popular retreated 7.5 percent to 1.71 euros and Bankinter dropped 4.3 percent to 2.81 euros. A gauge of bank shares lost 1 percent, led by Spanish and Italian lenders.
International Consolidated Airlines Group SA dropped 2.7 percent to 137.1 pence amid concern that Bankia, its largest shareholder, may sell a stake in the company. Bankia’s Goirigolzarri said on May 26 that the bank will give details on any share sales when it presents its strategic plan in June.
Rio Tinto, the world’s third-biggest mining company, gained 2.2 percent to 2,857.5 pence, Antofagasta Plc increased 2.1 percent to 1,038 pence and BHP Billiton Ltd., the largest mining company, rose 0.8 percent to 1,716.5 pence.
A gauge of mining shares increased 1.5 percent for the biggest advance of the 19 industry groups in the Stoxx 600 as copper climbed for a third day in London.
Inventories of the metal monitored by the Shanghai Futures Exchange slumped for a seventh week, the longest losing streak in a year, data from the bourse showed.
Aveva, Technicolor Climb
Aveva Group Plc led technology companies higher, surging 11 percent to 1,638 pence. The maker of engineering software products reported full-year revenue of 195.9 million pounds ($307 million), topping the average analyst estimate of 192.2 million pounds. Chief Executive Officer Richard Longdon said, “We are confident about the prospects for 2012-13.”
Technicolor SA surged 8.9 percent to 1.52 euros in Paris after investor Vector Capital Corp. offered to back a 186 million-euro capital increase and increase its holding in the producer of film-making technology to almost 30 percent.
The volume of shares changing hands on the Stoxx 600 was 44 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
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