By Carla Mozee, MarketWatch

Vivendi builds up stake in Mediaset again

European stocks closed with minor gains Friday, with the banking sector again in focus after settlements with U.S. regulators, as the Italian government prepared a bailout for troubled lender Monte dei Paschi di Siena SpA.

The Stoxx Europe 600 index closed up less than 1 point at 359.97 as basic materials, financial and consumer issues fell. But advancers were led by technology, utility and telecom shares. The benchmark on Thursday fell 0.2% (http://www.marketwatch.com/story/european-stocks-slip-as-banca-monte-dei-paschi-stands-on-the-brink-2016-12-22).

The pan-European index finished fractionally lower for the week, during which the market saw lower trading volume as investors prepared for the Christmas holiday.

See: When are European markets closed for Christmas and New Year's holidays? (http://www.marketwatch.com/story/when-are-european-markets-closed-for-christmas-and-new-years-holidays-2016-12-19)

DOJ settles with banks: Deutsche Bank AG shares (DBK.XE) (DBK.XE) finished up 0.3%, but well off session highs, after the German lender late Thursday agreed to a $7.2 billion settlement of mortgage-backed securities claims with the U.S. Justice Department (http://www.marketwatch.com/story/deutsche-bank-agrees-to-72-billion-settlement-in-mortgage-probe-2016-12-22). That's less than the $14 billion U.S. authorities had initially sought.

Meanwhile, Credit Suisse AG shares (CSGN.EB) (CSGN.EB) swung down 0.9% as the Swiss lender reached a $5.2 billon settlement with the DOJ (http://www.marketwatch.com/story/credit-suisse-settles-doj-probe-for-53-bln-2016-12-23)over its selling of mortgage-backed securities before the financial crisis. Credit Suisse will take a $2 billion charge to its results in the current quarter.

"There is finally some good news for European banking sector," said Naeem Aslam, chief market analyst at ThinkMarkets UK, in a note. "The amount of $14 billion which was initially expected by Deutsche could have put the bank under a lot of strain. Its stock plummeted as the bank waited for a result, as traders were not confident about the bank's ability to carve out a deal."

Elsewhere in the sector, Barclays PLC (BCS) (BCS) shares lost 0.9% after the British bank said it would fight a civil suit filed by the Department of Justice (http://www.marketwatch.com/story/doj-sues-barclays-bank-for-crisis-era-mortgage-securities-fraud-2016-12-22) alleging mortgage-backed securities fraud.

BMPS heads for bailout: Meanwhile, the FTSE Italia All-Share Bank Index climbed 0.6% as the Italian government reportedly prepared (https://www.bloomberg.com/news/articles/2016-12-23/monte-paschi-s-544-year-journey-from-the-renaissance-to-rescue) a bailout of struggling Banca Monte dei Paschi di Siena (BMPS.MI) . The world's oldest lender said Thursday it failed to raise EUR5 billion to recapitalize (http://www.marketwatch.com/story/monte-dei-paschi-says-it-failed-to-raise-capital-2016-12-23). The bank's shares were suspended for trading on Friday by the Italian market regulator.

The Italian government on Friday approved a EUR20 billion fund (http://www.marketwatch.com/story/italy-creates-20-billion-fund-to-back-troubled-banks-2016-12-22)to aid the country's troubled banks, paving the way for the government to rescue Banca Monte dei Paschi, which has struggled with a hefty debt load.

Other Italian bank stocks rose. Mediobanca SpA (MB.MI) and Banca Popolare di Milano (PMI.MI) each added 1.3% and Intesa Sanpaolo SpA (ISP.MI) gained 1.2%. But UniCredit SpA (UCG.MI) turned lower to close down 0.6%.

Other movers: Vivendi SA shares (VIV.FR) reversed course and fell 0.7%. The French group said it now has a 28.8% stake in Italian broadcaster Mediaset SpA (http://www.marketwatch.com/story/vivendi-lifts-its-mediaset-stake-to-288-2016-12-23)(MS.MI) despite ongoing legal battles between the companies. Vivendi is aiming to build a 30% stake, the legal threshold after which an investor is required to launch a takeover offer. Mediaset shares moved up 0.3%.

National indexes: Italy's FTSE MIB ended 1.2% higher at 19,345.02, and Germany's DAX 30 index edged down 0.1% to 11,449.93.

France's CAC 40 index picked up 0.1% at 4,839.68, while the U.K.'s FTSE 100 index ended up 0.1% at 7,068.17 (http://www.marketwatch.com/story/ftse-100-meanders-as-banks-take-center-stage-2016-12-23).

Economic docket: The French economy grew 0.2% quarter-on-quarter in the third quarter (http://www.marketwatch.com/story/french-economy-grows-02-on-quarter-2016-12-23), statistics agency Insee said Friday, confirming an earlier reading.

The U.K. economy grew faster than previously thought (http://www.marketwatch.com/story/uk-gdp-grew-faster-than-seen-post-brexit-vote-2016-12-23) in the three months following June's vote to leave the European Union. The growth rate was moved up to 0.6% compared with a previous estimate of 0.5%.

 

(END) Dow Jones Newswires

December 23, 2016 12:09 ET (17:09 GMT)

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