Europe shares weighed by Italy

Steep falls among Italian banks have pushed the pan-European index into the red.

Stocks in Europe slipped on Monday, with losses among Italian banks putting the pan-European on track for its first loss in four sessions.

In late morning trade, the FTSE 100 index had edged back 0.03 per cent, the French CAC 40 slipped 0.25 per cent and Germany’s DAX inched down 0.10 per cent.

The Stoxx Europe 600 index shed 0.1 per cent in morning trade, with only the basic materials, utilities and health care sectors moving higher.

It was weighed heaviest by financials, with Italy’s Banca Monte dei Paschi di Siena dropping 8.5 per cent. The move came after a report that the European Central Bank is pushing the lender to draft a new plan aimed at reducing non-performing loans.

Other Italian bank shares were lower, with Banca Popolare dell’Emilia Romagna down 3.7 per cent, Intesa Sanpaolo off 3.8 per cent and Banca Popolare di Milano lower by 1.6 per cent.

The Stoxx 600 on Friday ended 0.7 per cent higher, and finished the week up 3.2 per cent to break a four-week string of declines.

Equities have been clawing back Brexit-fueled losses, as the UK government has yet to start formal talks about its terms in exiting the European Union after last month’s referendum.

Still, in the face of such Brexit-related uncertainty, shareholders in the London Stock Exchange Group will vote Monday on the proposed merger with Deutsche Boerse. LSE shares were down 0.7 per cent, and Deutsche Boerse shares were up 0.1 per cent.

Germany’s DAX 30 fell 0.4 per cent, and the UK’s FTSE 100 dropped by 0.2 per cent.

France’s CAC 40 lost 0.5 per cent, while Italy’s FTSE MIB fell 1.2 per cent. Spain’s IBEX 35 picked up 0.1 per cent.

Volkswagen was down 4 per cent as the German automaker rejected demands that it pay compensation to European car owners who bought tainted diesel vehicles.

Moneysupermarket.com Group shares dropped as Barclays cut its rating on the price comparison website company to equalweight and cut its view on 2017 estimated per-share earnings by 8 per cent. “We believe Moneysupermarket offers attractive structural growth in the medium term. But our economists now expect a UK recession in 2017, and there is some cyclical exposure, which makes us cautious,” said Barclays.

Marks & Spencer Group fell 4.6 per cent following a ratings downgrade on the retailer to hold from buy at Investec.

- Dow Jones newswires