Europe Report: Peugeot deal drags down car giant’s shares

EUROPEAN stocks inched lower in thin trade yesterday, as Deutsche Bank’s surprise quarterly loss prompted investors to cash in recent gains on banking stocks.

Shares in Germany’s biggest lender sank 5.4 per cent, wiping about €2.2bn (£1.8bn) off its market capitalisation.

Commerzbank fell 4.5 per cent, Banco Popolare dropped 3.1 per cent and Credit Suisse shed 2.5 per cent.

Despite the day’s sell-off among banks, the Stoxx bank index is still up 5.5 per cent in 2014, Europe’s best sector performance so far this year.

The FTSEurofirst 300 index of top European shares ended 0.1 per cent lower at 1,344.17 points. The Eurozone’s blue-chip Euro Stoxx 50 index ended down 0.03 per cent at 3,153.17.

Trading volumes were light with US markets closed for a public holiday.

Struggling French carmaker Peugeot Citroen was also among the top losers, sinking 11 per cent after a source told Reuters the group’s board has approved a dilutive €3bn capital increase, with China’s Dongfeng and the French government taking a significant stake.

Around Europe, Germany’s Dax index lost 0.3 per cent, and France’s Cac 40 fell 0.1 per cent. European stocks have rallied since last June as a pick-up in the region’s macro indicators and a more dovish European Central Bank prompted investors to scoop up European shares. That has led to massive investment inflows.