European Markets Finish February With 2% Loss on Deflation Worries

Lucy Stoeva
29 Feb, 2016
New York City

European markets closed mixed on Monday after central bank in China stimulus offset the inconclusive G-20 nations meeting. Victoria Oil & Gas posted revenue increase of 63%. Italian banks continued to drift lower on loan loss worries.

[R]4:00 PM Frankfurt, Germany – European markets closed mixed on Monday after central bank in China stimulus offset the inconclusive G-20 nations meeting. Victoria Oil & Gas posted revenue increase of 63%. Italian banks continued to drift lower on loan loss worries.[/R]

European bourses closed mixed on Monday after China’s central bank decision to stimulate the economy, partially offset the disappointing signals from the G-20 meeting.

People’s Bank of China cut the requirements for bank reserves by 0.5% in an effort to fuel credit growth and support the economy.

The meeting of the G-20 nations concluded with no clear path for overcoming the excess volatility and the slowdown of global growth and lack of clear signals added to market jitters.

Inflation in the euro zone continued to decline and dropped to negative 0.2% in February, compared with a 0.3% rise in January, according to preliminary Eurostat data.

The low inflation boosted expectations for more economic stimulus from the European Central Bank at the conclusion of its next policy meeting in March.

Financial sector led the decliners, with troubled Italian lender Banca Monte dei Paschi di Siena plummeting 4.1%.

On the positive side, U.K. mining companies were among the top gainers on the upswing in commodity prices. Anglo Amercian rose 6.6% and Glencore gained 3.9%.

In London, FTSE 100 index advanced 84.28, or 1.4%, to 6,097.09,

In Frankfurt, the DAX index declined 17.90, or 0.2%, to 9,495.40, while in Paris, the CAC 40 index added 38.98, or 0.9%, to 4,353.55.

The major indexes in Europe, except the FTSE 100, have lost between 2% and 3% in February.

The FTSE 100 is set to close the month slightly positive due to the heavy weight of the resource companies, which staged a rebound in February.

Fiat Chrysler Automobiles N.V jumped 4.3% to €6.34 on speculation that the vehicle maker could be a potential acquisition target.

Last week Peugeot said it was willing to discuss tie-ups with other carmakers.

Victoria Oil & Gas Plc tumbled 8.8% to 45.50 pence despite an upbeat report for the first-half of the fiscal year.

Revenue increased by 63% to $18.9 million for the six months ended November 30, thanks to two new gas-fired power stations and new industrial users.

Adjusted EBITDA reached $9 million, or more than four times higher than the $1.7 million a year ago.

Net cash was $6.3 million, up from $5.1 million at the end of the previous quarter.

The company reported an increase of 126% in average production rate to 8.85 million standard cubic feet per day.

Wm. Morrison Supermarkets Plc soared 5.9% to 199 pence after the U.K. based retail group signed a distribution deal with online retailer Amazon.