By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European shares slipped Friday, as
shares of banking firm BNP Paribas SA posted their sharpest decline
in more than a year, but the region's equity index was holding to
gains for the week as well as for the month.
The Stoxx Europe 600 was off less than 1 point at 334.38, but
was on track for a 0.7% advance for the week. That would mark the
seventh consecutive week of rises for the index.
The Stoxx 600 was up nearly 2% for the month, during which the
pan-European gauge reached its highest level six years. Germany's
DAX during May logged a record closing high, and the U.K.'s FTSE
100 hit its best level since late December 1999.
"Over here in Europe, major benchmarks are still finding much of
their support built on expectations of increased stimulus next
week, after European Central Bank President Mario Draghi pledged to
ease monetary policy in June if necessary," said ETX Capital in a
Friday note.
The euro-zone economy has been grappling with low inflation and
lackluster growth. Earlier this week, Yves Mersch, an ECB executive
board member, said the ECB's council members were "unanimously"
comfortable with taking action at their meeting, which is set for
Thursday.
Data released Friday showed Spanish inflation eased slightly in
May, but the country still faced deflation risks. In Italy, the
consumer-price index fell 0.1% in May from April.
The Stoxx 600 is up roughly 5% so far this year. At the same
time a year ago, the index was down about 1%.
Hurting on Friday were BNP Paribas shares as they lost 4.5%. It
was their worst decline since April 2013, with the move coming as
the U.S. Justice Department seeks $10 billion from the French bank
to resolve a criminal probe into allegations that for years it
evaded sanctions against Iran and other countries.
Talks are ongoing over whether BNP will temporarily lose its
ability to transfer money into and out of the U.S., The Wall Street
Journal reported, citing unnamed people familiar with the matter.
It's also possible that an agreement is likely weeks away and that
BNP may pay less than the $10 billion the DOJ wants.
BNP shares lagged France's CAC 40 index , which fell 0.4% to
4,510.54. The index was in line for a monthly increase of 0.5%.
Miners were held lower Friday as iron-ore prices slumped. Anglo
American PLC dropped 3.3%, BHP Billiton PLC (BHP) fell 2.1%, and
Rio Tinto PLC (RIO) gave up 2.8%. Mining stocks put pressure on the
FTSE 100, which fell 0.2% to 6,856.82. Its monthly gain stood at
1.2%.
Meanwhile, shares of Voestalpine AG lost 1.2% following a
downgrade to neutral at J.P. Morgan, which cited a lack of
catalysts in the short-term for the steel-product maker as reason
for the move.
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