European shares reversed early gains and dipped on Wednesday morning, with traders citing worries over potential failures in the European Central Bank’s ongoing bank stress tests.
The FTSEurofirst 300 index of top European shares was down 0.18 per cent at 1,296.98 points.
Traders pointed to a report from Spain's Efe news service which said that at least 11 banks from six European countries are set to fail a region-wide financial health check this weekend.
Efe said banks from Austria, Italy, Belgium, Cyprus, Portugal and Greece had failed the ECB review based on preliminary data, but gave no details of the size of the capital holes at the banks.
Austria's Erste Bank has rejected suggestions that it was one of at least 11 banks that had failed the health check. The other banks listed by Efe were Italy's Banco Popolare, Monte dei Paschi and Banca Popolare di Milano, Greece's Alpha Bank, Piraeus Bank and Eurobank, Portugal's Millennium BCP and Belgium's Dexia. Efe also said a second, unnamed Austrian bank and a Cypriot bank were set to fail.
The Irish Times reported on Wednesday that Permanent TSB, which is also believed to have failed the stress tests, is expected to announce details of its capital-raising plan on Sunday.
The euro zone banking index was down 0.6 per cent.
However, traders said losses in the sector were limited by expectations of ECB action in corporate bond market and hopes that even failures would remove uncertainty.
Reuters
