Sixth day of falling stock

EUROPEAN shares fell for the sixth consecutive session in low volume yesterday after German Chancellor Angela Merkel restated her position against changing the role of the European Central Bank to ease the Eurozone debt crisis.

The market trimmed gains after the comments by Merkel about the ECB as well as remarks that she remained opposed to the use of jointly issued euro bonds to combat the region’s debt crisis.

Banks, which have been in focus due to their exposure to the region's sovereign debt, pared earlier gains.

But after a sell-off of 10 per cent over the past five days many banking stocks were in “oversold” territory after the Relative Strength Index (RSI) came close to 30 on Wednesday and technical factors kept the up one per cent.

The main mover in the banking sector was Belgian lender Dexia, up 27.9 per cent, after a French Finance Ministry source said an agreement to guarantee the troubled bank’s financing would be reached within days.

On Wednesday Dexia’s RSI was at 22.8, but had risen to 34.8 by yesterday.