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 starting Friday.
The rest of Europe also headed lower, with the benchmark index
in the red for its fifth straight day.
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 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 1.3% to 1,449.63 on
the back of the sanctions, while the smaller RTS index slid 1.7% to
1,217.88. The ruble (USDRUB) also slumped against the dollar, so
that the greenback bought 37.518 rubles, up 0.4% according to
FactSet.
More broadly in Europe, the Stoxx Europe 600 index fell 0.1% to
close at 344.27. France's CAC 40 index lost 0.2% to 4,440.90, while
Germany's DAX 30 index dropped 0.1% to 9,691.28.
The U.K.'s FTSE 100 index lost 0.5% to 6,799.62. 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) rose 1.1% and 1.2%, respectively, after
the banks warned they would relocate to England if Scotland votes
to leave 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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