PSI 20 stock exchange
European shares fell on Monday, which was in contrast to the good performance last week. Reason for pessimism of investors became political situation in Portugal, where opposition parties have agreed to act together, which can lead to the fall of the current government.
The blue chip index of the Portuguese PSI 20 stock exchange dropped by 1.9% compared to the decrease by about 0.3% of pan-European benchmark FTSEurofirst 300. The other major indexes in Europe - the German DAX, the French CAC 40 and the Spanish IBEX 30 also depreciated by between 0.3 and 0.5 percent.
Two small leftist parties, entered the Portuguese parliament after elections last month, completed negotiations with the Socialist Party to establish an alternative government of the ruling center-right. Opposition parties have criticized the policy of austerity and many of the reforms imposed in the country due to the debt crisis.
Yields on Portuguese government bonds reached a four-month peak, while banks suffered most from the sale of shares. Banco Comercial Portugues lost 6.1% of its market value, while shares of Banif dropped by 7.1%.
"The sense of crisis seems to have returned to Portugal. In the short term there will be volatility, but in the medium term we maintain constructive" commented analysts from Bank Credit Suisse, cited by Reuters. "Any market volatility created by the political situation there will be limited thanks to quantitative easing and supervision of the European Central Bank. Moreover, the country is no longer in a critical economic and financial situation," they added.
Outside Portugal, the strongest decline in European markets registered shares in the manufacturer of automotive parts Continental. They fell by 5.4% after the company's results for the quarter disappointed investors. The negative sentiment spread and to Renault, whose shares fell 2.3%. The reason for this became the statements of the French Government did not want a merger between the carmaker and its Japanese partner Nissan. German carrier Lufthansa fell 2.4% because of a strike by employees, leading to cancellations.
Energy stocks were positive except market with average growth of 1.5%. Reason for this was the slight appreciation of Brent crude oil to $ 48 a barrel after OPEC said it expects world demand to remain strong next year. Shares of Ericsson rose 2.2% after the telecom equipment manufacturer announced a partnership with Cisco Systems.