By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Portuguese stocks slumped in an
otherwise upbeat European market on Monday, after the country's
high court struck down some of the austerity measures enacted as
part of its rescue plan.
Most other European stock markets climbed, rebounding after the
biggest weekly selloff since November in the wake of Friday's weak
U.S. employment data.
The Stoxx Europe 600 index gained 0.4% to 288.36, after posting
the biggest daily loss since October on Friday.
Portugal's PSI 20 index lost 0.9% to 5,584.05. The European
Commission on Sunday warned that if the nation fails to implement
its austerity program it could put future financial aid at risk.
The statement came after the country's high court ruled against
some of the austerity measures affecting public employees, creating
a large hole in the 2013 fiscal budget.
Analysts at Barclays said in a note that the court's decision
"comes at a particularly delicate time as Portugal was expecting
this week a favorable decision by its European peers (at the
Eurogroup/Ecofin meetings) on lengthening the maturity of the
program loans."
Shares of Banco Comercial Português SA lost 1.2% and Banco
Espirito Santo SA dropped 2.7%.
In Greece, shares of National Bank of Greece SA sank 15% and
Eurobank Ergasias SA rose 3.3%, after a planned merger between the
two banks was halted by the government over the weekend. The
unexpected move comes amid fears that the merged lender would
become too big to be bailed out by the government.
The ATHEX Composite lost 0.7% to 817.17.
Among other notable decliners, shares of Spirent Communications
PLC sank 3.3%, after UBS cut the firm to neutral from buy, worried
that the recovery is taking longer than anticipated.
Shares of Barry Callebaut AG, , the world's largest chocolate
maker by volume, dropped 2.9%, after first-half profit came in
below market expectations with a 7% decline.
The broader European stock markets, however, traded higher,
partly recovering from a sharp selloff last Friday, triggered by
U.S. nonfarm-payrolls data coming in well below estimates. The data
followed other disappointing releases last week, including initial
jobless claims and the ISM services index
U.S. stock futures pointed to a higher open on Wall Street.
France's CAC 40 index gained 0.7% to 3,690.82, with shares of
oil major Total SA (TOT) up 0.9% as oil prices moved higher.
In Germany, the DAX 30 index rose 0.3% to 7,683.73. Read:
Germany's account surplus jumps; no one is happy
The U.K.'s FTSE 100 index added 0.3% to 6,269.37. Shares of
Polymetal International PLC added 6.2%, after the gold and silver
miner said 2012 full-year profit jumped 38% on the back of higher
sales and bringing new production sites on line.
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