By Dow Jones Business News,
July 14, 2014, 12:05:00 PM EDT
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rose for a second straight day on Monday as fears about the soundness
of Portuguese banks continued to recede.
The Stoxx Europe 600 index picked up 0.9% to close at 339.79, after last werek posting its biggest weekly percentage
loss since March.
Last week's losses came as Portuguese conglomerate Espírito Santo International SA missed an interest payment,
sending shivers through Portugal's financial sector and spurring fears about the rest of the Espirito Santo empire.
Trading in Banco Espírito Santo SA was suspended late last week. On Monday, shares slid 7.5% even as the bank
appointed Vítor Bento, a well-respected economist, as its new chief executive in an effort to restore confidence in
the company. Pedro Passos Coelho, Portugal's prime minister, over the weekend ruled out any potential state support for
the lender and said "private businesses have to suffer the consequences of the bad deals they make," according to
"It's hardly surprising that, just five years on from the worst global banking crisis in recent memory, the market has
the scope to overreact to banking-contagion fears," said David White, trader at Spreadex, in a note.
Portugal's PSI 20 index rose 0.6% to 6,181.73, and Portuguese government bonds also continued to rise, sending the
yield on 10-year government paper down 5 basis points to 3.79%.
Elsewhere, France's CAC 40 index gained 0.8% to 4,350.04. Germany's DAX 30 index rallied 1.2% to 9,783.01, a day
after the country won the World Cup title in soccer against Argentina.
The U.K.'sFTSE 100 index added 0.8% to 6,746.14. Shire PLC gained 0.7% after a revised offer from AbbVie Inc.
( ABBV ). Shire said it would be willing to recommend the takeover proposal to shareholders.
Shares of Tesco PLC (TSCDY) climbed 2.3% in London after Cantor Fitzgerald lifted the grocery chain to buy from sell,
according to Dow Jones Newswires.
Shares of Sports Direct International PLC put on 3.6% after the retailer said it formed a partnership with MySale
Group to push into the Australian and New Zealand markets.
Drax Group PLC jumped 4.4% after a favorable High Court ruling that could help get one of the company's power plants
a subsidy from a renewable-energy program.
In data news, euro-zone industrial production slumped 1.1% in May from April, marking the largest month-to-month drop
since September 2012 and highlighting the continued economic weakness of the currency bloc. The report comes after
France, Italy and Germany all posted disappointing data last week.
Later in the week, German's ZEW report, euro-zone trade data and inflation numbers will provide further insights into
the strength of the region's recovery. U.K. labor market figures are also out on Wednesday. Read: Move over Portugal,
Germany is Europe's real concern this week
After the markets close on Monday, European Central Bank President Mario Draghi speaks to the European Parliament in
Strasbourg. The ECB boss is expected to confirm that the governing council stands ready to act with a full-blown
quantitative-easing program if needed and focus on keeping a lid on further euro gains, according to Simon Smith, chief
economist at FxPro.
The euro (EURUSD) traded at $1.3626, up from $1.3609 late on Friday.
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