By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Russian stocks posted the biggest losses
in Europe on Thursday after the European Union agreed to levy new
sanctions against Moscow Friday.
The rest of Europe also headed lower, with the benchmark index
heading for its fifth straight day in the red.
The major indexes had started in positive territory Thursday
morning after a poll on the Scottish referendum put the pro-union
campaign back in the lead, but gains then fizzled.
Russia sanctions: The Russia-Ukraine conflict was back in the
spotlight after the European Union said it would launch its new
package of sanctions on Russia on Friday, ending a standoff that
has lasted for most of the week. The 28 member states already
agreed on the sanctions Monday, but held off on implementation as
they watched if Russia would work to scale back tension in
Ukraine.
Market reaction: Russia's MICEX index lost 1% to 1,454.15 on the
back of the sanctions, while the smaller RTS index slid 1.6% to
1,218.93. The ruble (USDRUB) also slumped against the dollar, so
that the greenback bought 37.554 rubles, up 0.6% according to
FactSet.
More broadly in Europe, the Stoxx Europe 600 index fell 0.2% to
344.08, on track for the lowest close in over a week. France's CAC
40 index lost 0.3% to 4,436.54, while Germany's DAX 30 index
dropped 0.1% to 9,689.87.
The U.K.'s FTSE 100 index lost 0.6% to 6,789.30. The pound
(GBPUSD) climbed to $1.6226 from $1.6202 Wednesday afternoon in New
York, getting a lift from the survey pointing to a "no" for
Scotland's independence.
RBS and Lloyds boost: Shares of Royal Bank of Scotland (RBS) and
Lloyds Banking Group (LYG) both rose 0.9% after the banks warned
they would relocate to England if Scotland votes in favor of
leaving the U.K. at the referendum on Sept. 18.
Data: German inflation was stuck at a 4 1/2-year low of 0.8% in
August, data from the Federal Statistics Office confirmed on
Thursday. Inflation in France was 0.5% in August as expected.
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