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European stock markets mostly fall

RBS shares jump, however, despite Libor fines

RBS shares jump, however, despite Libor fines( AFP-Photo)
RBS shares jump, however, despite Libor fines( AFP-Photo)

RBS shares jump, however, despite Libor fines

(AFP) – European stock markets mostly fell on Wednesday but London’s FTSE gained as Royal Bank of Scotland (RBS) shares rose, even as the bank said that it faced big fines over the Libor rate-rigging crisis.

In foreign exchange deals, the European single currency slid to $1.3535 from $1.3582 late in New York on Tuesday.

London’s FTSE 100 index of top companies rose by 0.37% to 6,306.06 points in late morning deals.

However, Frankfurt’s DAX dropped 0.21% to 7,648.57 points and in Paris the CAC shed 0.55% to 3,674.38.

Madrid’s IBEX 35 slipped 0.46% lower in value and Milan’s FTSEMIB index lost 0.65%.

“With no major economic data published today markets are lacking impulses for direction,” said Anita Paluch, a trader at Gekko Global Markets.

“The overall focus on earnings did not yield the much hoped for boost for equities,” she added.

Gold prices dipped to $1,671.30 an ounce from $1,673.50 on the London Bullion Market on Tuesday.

Shares in Royal Bank of Scotland rose 1.0% to 341 pence after the lender said it expected to pay “significant penalties” and face other sanctions from British and US financial regulators over its role in the Libor rate-rigging scandal.

Reports said RBS would settle by paying US and British authorities up to £500m ($783m, €577m), in an announcement expected on Wednesday.

This sum would be more than Libor-related fines handed out to British bank Barclays last year but less than the amount slapped on Swiss lender UBS.

Angus Campbell, head of market analysis at Capital Spreads trading group, said the predicted fines were “towards the low end of expectations, so initial response from the market is positive.”

Libor, or London Interbank Offered Rate, is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money. Euribor is the eurozone equivalent.

Shares in ArcelorMittal rallied 1.69% to €12.64 in Paris deals after the world’s top steel producer posted mixed earnings news.

The company stumbled into the red last year with a net loss of $3.72bn (€ 2.75bn euros) largely owing to costs related to Europe’s economic strains, said ArcelorMittal, adding that it envisaged a rebound this year.

Asian stock markets mostly closed higher on Wednesday following big losses in the previous session, with Tokyo surging as the yen tumbled after Bank of Japan Governor Masaaki Shirakawa said he would step down early.

Tokyo soared 3.37% to 11,463.75 points, the highest close since September 2008 soon after the collapse of US bank Lehman Brothers and at the height of the global financial crisis.

Japanese foreign exchange traders welcomed Shirakawa’s announcement that he would step down on 19 March, about three weeks before the end of his term.

It fuelled expectations that Prime Minister Shinzo Abe would likely fill the post with someone who shares his ideas on aggressive monetary easing that would see more yen pumped into the economy.

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