European Stocks Little Changed in Thin Trading as Banks Decline

Stoxx 600 Little Changed in Thin Trading Before Holidays

European stocks were little changed, after two straight weeks of gains, as investors kicked off the last full week of trading of the year.

The Stoxx Europe 600 Index fell 0.1 percent at the close. In a reversal of the recent rotation into cyclical shares, banks and miners declined as defensive stocks including utilities, real estate and technology firms advanced.

  • The VStoxx Index of euro-area stock volatility was little changed near its lowest level in more than two years. The measure has tumbled 39 percent since the U.S. election as speculation of stronger economic growth boosted equities.
  • The volume of Stoxx 600 shares traded on Monday was about a third lower than the 30-day average, data compiled by Bloomberg show.
  • Lenders fell for a second day. Banca Monte dei Paschi di Siena SpA slid 11 percent after saying it will sell shares to institutional investors through Thursday, as it aims to complete raising funds by year-end to avoid a rescue by the Italian government.
  • Deutsche Bank AG slid 4.5 percent amid reports its settlement with the U.S. Department of Justice could come this week. 
  • Barclays Plc declined 2.6 percent. The lender is preparing to tell 7,000 clients to do more trading with the firm or find another bank, in a bid to boost returns.
  • The Stoxx 600 is on course for its first annual decline since the peak of the sovereign-debt crisis in 2011, while the FTSE 100 is poised for its best rally in three years as a post-Brexit slump in the pound boosted its exporters.
  • “Having come off a decent December so far for European stocks which have seen a number of significant breakouts, the key question as we head into year-end is whether these gains of the past two weeks are likely to be sustained,” according to Michael Hewson, a market analyst at CMC Markets in London.
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