By Tommy Stubbington
European shares slipped on Friday, weighed by declines in
banking stocks, as the previous session's hefty rally petered
out.
Bank shares were a notable weak spot, hit by a more than 10%
fall in shares of Spanish lender Banco Santander after it launched
a EUR7.5 billion ($8.88 billion) capital hike. That also hurt the
broader Madrid stock market, which was 2.0% lower.
Analysts at Berenberg said Santander's decision to raise cash
undermines the credibility of the European Central Bank's health
check, which the Santander comfortably passed two months ago.
"We see increased pressure on other banks to raise capital,"
Berenberg said.
Stocks around the world had surged on Thursday as investors bet
that central banks will continue to flood financial markets with
cheap money. Signs that the U.S. Federal Reserve is in no hurry to
raise interest rates and a growing consensus that the European
Central Bank will soon launch a bond-buying stimulus program had
bolstered markets.
Markets were also buoyed by signs that oil prices are
stabilizing after some steep declines at the start of 2015. Brent
crude was only marginally lower at $50.78 a barrel on Friday.
Still, the gains fizzled out in Europe Friday with investors
awaiting jobs data from the U.S. later in the session.
The Stoxx Europe 600 was 0.2% lower midmorning, having climbed
2.8% on Thursday.
Germany's DAX fell 0.3%, while France's CAC 40 and the U.K.'s
FTSE 100 were 0.4% lower.
U.S. stock futures pointed to a 0.1% opening loss for the
S&P 500. Changes in futures aren't necessarily reflected in
market moves after the opening bell.
Later, data are expected to show the U.S. economy created
240,000 jobs in December.
Confidence about the labor market, which has fueled a dollar
rally in recent months, "comes in for some scrutiny" with the
monthly payroll report, said Bank of Tokyo-Mitsubishi analyst Derek
Halpenny.
The euro was a touch higher against the buck on Friday at
$1.1817, but still close to its recent nine-year low.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
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