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  • Market News
  • 21 January 2014 :: The Banking Sector In Europe Is Under Pressure
21 January 2014

The Banking Sector In Europe Is Under Pressure

By Kristina Leonova: Chief Analyst in the Investment Research Department

The Banking Sector In Europe Is Under Pressure
In absence of the American players on Monday, the European stock indices finished the trading session without any significant development.

From the macroeconomic statistics published yesterday, it should be noted that the price index of producers of Germany for December grew by 0.1%, at average forecasts of 0.0%. Thus, in comparison with data from the similar time period last year, decrease of the indicator made 0.5%, as expected.

As a result, the index of Great Britain, FTSE 100, increased by 0.11%, French CAC40 lost 0.11% and the German DAX went to a minus by 0.28%. The regional STXE 600 indicator, in turn, decreased by 0.1% and was closed on a level of 335.5 points.

Worse off than the other sectors of the market were shares of the banking sector. So, the shares of Commerzbank, Credit Suisse and ICAP decreased by 4.5%, 2.5% and 4.3% respectively. Additionally to that, market capitalization of the largest creditor of Europe, Deutsche Bank, decreased by 5.4%, after it reported that the loss before payment of taxes in the fourth quarter made 1.15 billion Euros. Analysts, in turn, predicted profit at the level of 628.5 million Euros.

The background this morning looks rather positive: futures for the American indices add 0.5%, bull moods prevail in the Asian-Pacific, with Japanese Nikkei increasing by 1.4%, the Hong Kong Hang Seng adds 0.6%, and the Chinese Shanghai Composite grew by 0.7%. The positive situation is mainly due to the statement from the Bank of China, and their willingness to provide additional liquidity to small and large banks of the country.

The situation on the commodities market also remains the same, and there have not been any strong changes for the last few days. Brent is increasing by 0.19%, traded on a level of 106.55$ per barrel, WTI is down by 0.34%, on a level of 94.27$ per barrel. Gold adds in value 0.02%, traded on the level of 1252.10$ per troy ounce, and silver is down by 0.49% at the level of 20.20$ per troy ounce.

In America, the large banks already published their reports, and this week, the market focus will be on papers of the hi-tech companies and retailers. Figures from Microsoft, IBM, Starbucks and Netflix are expected. Today, Johnson & Johnson and Verizon will publish reports. As for the most important statistics today, it is worth paying attention to the publication of the index of activity of ZEW across Germany, whereby a decrease from 62 points to 61.5 points is expected.

About the author
Kristina Leonova
Kristina Leonova
Chief Analyst in the Investment Research Department

Kristina Leonova is an up and coming market specialist - currently in the process of obtaining The Chartered Financial Analyst Degree in CFA Institute.

She began her career at Liteforex (ex. Mayzus) at only 20 years old, holding the position of the Assistant of the Chief Financial Officer.

She has since become invaluable to the Company, holding the position of Chief Analyst in the Investment Research Department, and now is also responsible for our world renowned market reviews.

She has a keen eye and a good gut instinct when it comes to analyzing the markets, always staying at the top of her game, with her work often being published on other websites and news vendors.

Mayzus is excited to welcome her as our new, top financial analyst.

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