European stocks mixed amid eurozone tensions

CAC 40 dropped 0,40 percent to 3 106,30, while Frankfurt added 0,30 percent to 6 494,77 points.
In foreign exchange trade, the European single currency edged up to US$1,2947 from US$1,2932 late in New York on Wednesday.
“Markets are fairly subdued this morning but with no sign of an improvement to the eurozone crisis on the horizon one would expect a resurgence of selling pressure soon,” said analyst Mike McCudden at brokerage Interactive Investor.
However, Madrid’s IBEX 35 index rallied 1,88 percent to 6 941,70 points, one day after sliding 2,77 percent to its lowest level since 2003 on fresh concerns about problems in Spain’s troubled banking sector.
Dealers said that Madrid was boosted after Spanish Prime Minister Mariano Rajoy’s government announced on Wednesday that it would partially nationalise the fourth-biggest listed bank, Bankia.
The conservative administration had previously refused to countenance the use of public money to rescue the banks.
“We’ve seen a bounce back — but only because Spanish government recognises it has a problem in the banking sector,” said CMC Markets analyst Michael Hewson.
“The U-turn by Rajoy about bailing out the banks increases the likelihood that the Spanish government may be open to further bailouts, hence the slight bounce.
“There are risks, given the deteriorating economy in Spain and (this) could well leave the sovereign vulnerable to a ratings downgrade.”
Bankia shares tumbled yesterday after the state stepped in to nationalise it, slumping 3,10 percent to 2 064 euros, but other lenders climbed.
The eurozone’s biggest bank by capital, Santander, advanced 2,07 percent to 4 738 euros and BBVA rose 2,20 percent to 5,12 euros.
Across in Athens yesterday, Greece’s socialist leader headed into make-or-break talks in a desperate bid to form a coalition government and stave off repeat elections.
Evangelos Venizelos, who as finance minister supervised debt-ridden Greece’s 240 billion euro (US$311 billion) EU-IMF bailout, is the third leader to attempt to form a government since weekend polls delivered a strong message against austerity.
The European Union is, meanwhile, sending a strong message that Greece must honour the rescue conditions of budget cuts and deep reforms.
In Brussels, an EU official told AFP that Greece was expecting to receive a 4,2-billion-euro loan yesterday, but a further one billion would be held back till Monday.
“While markets currently are managing somewhat to stabilise, gains to the upside are likely to be limited . . . with many investors either preferring to stay on the sidelines until things concerning Greece are clearer, or simply feeling propelled to take profits,” said ETX Capital trader Markus Huber. — AFP.