European Markets Up; Monte dei Paschi Drops 8%

The Dax is volatile after a string of attacks over the weekend.
By Lisa Botter ,

Shares in Italian bank Monte dei Paschi (BMDPY) dropped 8% in morning trading in Milan, prompting a temporary halt to trading. The shares fell on concerns it may need additional capital. Talks between Italy and the European Commission about a possible bail-out have not yet been fruitful.

Monte dei Paschi is under pressure to sort out more than €10 billion ($10.98 billion) of non-performing loans. The bank is expected to not fare well in the European Banking Authority's stress tests, which will be released on Friday at 10 p.m. European time.

UniCredit shares in contrast were recently up 0.79%.

In London, the FTSE 100 was recently up 0.07% to 6,735.17.

In Frankfurt, the Dax is already having a volatile day as three fatal attacks over past two days sparked terrorist worries. However, the fatal shooting by an 18-year-old of nine mainly young people in Munich on Friday, and the murder on Sunday by a Syrian refugee of his wife in Reutlingen, southern Germany,  appear unconnected to any ideology.  The background to the third incident, when a suicide bomber on Sunday detonated a vest of explosives outside a festival in Ansbach, southern Germany, killing himself and injuring others, is unclear. The three incidents followed a knife rampage a week ago on a train by an Afghan teenager that was claimed by the Islamic State.

The benchmark index was recently up 0.91% to 10,240.09.

The Cac 40 in Paris was recently at 4,413.39., gaining 0.74%. 

Bookmaker William Hill (WIMHY) was up 6.97% after it was confirmed that 888 Holdings and Rank were considering a takeover bid for the bookmaker. Rank and 88 said this morning that no formal approach had been made but that they see "significant industrial logic in the combination."

William Hill said that is was not sure if the deal would enhance the company's strategic positioning or "deliver superior value to William Hill's strategy which is focused on increasing the group's diversification by growing its digital and international businesses."

Europe's largest low-cost airline Ryanair (RYAAY) - Get Report was up 5.6% in morning trading after it reiterated its full-year guidance of profit rise of around 12%, to a range of €1.38 billion to €1.43 billion ($1.51 billion to $1.57 billion).

This comes after first-quarter earnings missed analysts' expectations. Net profit  in the first quarter rose 4% compared with a year ago to €256 million and revenue grew by 2% to €1.69 billion. Analysts expected first-quarter revenue of €1.7 billion and profit of €260 million.

The company said that terrorist attacks in Europe and continued strikes impacted earnings. The company has also said it will focus more European airports following the U.K. decision to leave the European Union.

"We will pivot our growth away from U.K, airports and focus more on growing at our EU airports over the next two years," the company said.

Ericsson (ERIC) - Get Report this morning gained more than 3.39% after it was announced CEO Hand Vestberg would step down immediately. There has been growing shareholder discontent after a disappointing earnings from the Swedish telecom equipment maker.

Chairman Leif Johansson said, "In the current environment and as the company accelerates its strategy execution, the board of directors has decided that the time is right for a new leader to drive the next phase in Ericsson's development."

Luxury brands house LVMH (LVMUY)  gained 1.05%, after announcing it had sold Donna Karan to New York-based G-III in a $650 million deal. G-III is a clothing group that owns Calvin Klein and Tommy Hilfiger.

Philips (PHG) - Get Report  was recently up 1.47%. The Dutch company said that second-quarter Ebita rose 8.6% to €544 million, beating analysts' expectations of €519 million.

The health-care equipment maker expects earnings to increase in the second half of the year. However, the company said it is concerned about volatility in a number of markets. The company is in the midst of a cost-cutting program and recently spun off its lighting division.

Dow Jones Industrial Average mini futures were recently up 0.03% and S&P mini futures were also up 0.03%.

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