July 5, 2016 - 8:10 AM EDT
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European Markets Finished Mostly Lower Again On Brexit Worries

VIENNA (dpa-AFX) - The majority of the European markets ended Tuesday's session in the red, extending the weakness from the previous session. However, the FTSE of the U.K. bucked the trend of the region, following an announcement from the Bank of England. Financial stocks were under heavy pressure due to concerns over Brexit and weakness in the Italian banks. Energy stocks also took a hit from falling crude oil prices.

The Bank of England lowered its capital buffer requirements for banks as the outlook for financial stability turned challenging after the "Brexit" vote.

In its bi-annual Financial Stability Report, released Tuesday, the bank also vowed to take more actions to ensure stability in the financial system in the face of crystallizing risks.

The Financial Policy Committee of the bank trimmed the countercyclical capital buffer rate to zero percent from 0.5 percent of banks' U.K. exposures with immediate effect.

The FPC expects to maintain this zero percent countercyclical capital buffer rate until at least June 2017. The decision to reduce the buffer reverses a decision it took in March.

The bank also said the regulatory capital buffers will be reduced by GBP 5.7 billion, thus increasing the amount available for lending to British households and businesses by up to GBP 150 billion.

British politicians who campaigned fiercely to leave the European Union have stepped down when the time came to implement the "Brexit", European Commission President Jean-Claude Juncker said Tuesday, reiterating that there will not be any negotiations before the U.K. formally notifies of an exit.

Speaking at a plenary session of the European Parliament in Strasbourg, Juncker said "the radiant heroes of yesterday were sad heroes of today", referring to "Brexit" campaigners Boris Johnson and Nigel Farage.

Johnson and Farage are "retro-nationalists and not patriots", Juncker said.

"Patriots do not go overboard when the situation is difficult. They remain," he added.

He also accused the "Brexit" camp of not having a plan ready in advance for exiting the EU.

"Instead of developing a plan, they are leaving the boat," he said.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 1.72 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.08 percent.

The DAX of Germany dropped 1.82 percent and the CAC 40 of France fell 1.69 percent. The FTSE 100 of the U.K. gained 0.35 percent and the SMI of Switzerland finished higher by 0.21 percent.

In Frankfurt, Daimler decreased 3.72 percent and BMW fell 2.47 percent. Volkswagen also finished down by 2.83 percent.

ThyssenKrupp sank 6.75 percent and Salzgitter dropped 4.75 percent.

Commerzbank weakened by 2.57 percent and Deutsche Bank lost 0.77 percent.

In Paris, Peugeot declined 5.43 percent and Renault fell 3.73 percent. Car parts maker Valeo also surrendered 4.41 percent.

Technip dropped 5.23 percent and Total lost 1.60 percent.

Societe Generale decreased 3.62 percent and Credit Agricole forfeited 3.53 percent. BNP Paribas also closed down by 0.27 percent.

In London, homebuilders Barratt Development, Berkeley Group and Taylor Wimpey dropped 7-10 percent, a day after an influential survey suggested the U.K.'s construction sector suffered its worst performance in June since 2009.

Persimmon said that trading through the first half of the year has been strong. Group revenues for the period was 1.49 billion pounds, up 12% from the prior year. It expects the Group's first half operating margin will be ahead of the 23.0% delivered in the second half of 2015. The stock sank 7.18 percent.

Land Securities Group, the largest commercial property development and investment company in the U.K., tumbled 3.67 percent, and asset managers Aberdeen Asset Management lost 3.92 percent, after Standard Life Investments, the fund arm of Standard Life, suspended trading in its 2.9 billion-pound U.K. real estate fund. Shares of Standard Life retreated 5.20 percent.

UBS fell 3.88 percent in Zurich. The financial services giant said it has received a disclosure order from the Swiss Federal Tax Administration to hand over identifying information about current and former French clients.

Monte dei Paschi plunged 19.39 percent in Milan on a report that Italy is considering a capital plan for its third-largest bank.

However, rivals UniCredit, Banca Popolare di Milano and Banco Popolare finished with modest gains.

The euro area private sector growth remained unchanged in June, final data from Markit Economics showed Tuesday. The composite output index came in at 53.1 in June, the same as in May, but above the flash score of 52.8.

Eurozone retail sales increased for the second straight month in May, figures from Eurostat showed Tuesday. Retail sales climbed 0.4 percent month-over-month in May, following a 0.2 percent rise in April instead of a flat reading initially estimated.

The U.K. service sector activity growth weakened to match the 38-month low registered in April, survey results from Markit showed Tuesday. The Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index dropped to 52.3 in June from 53.5 in May. Nonetheless, the score was above the expected level of 52.8.

China's private sector activity expanded at the weakest pace in four months in June, survey data from Markit Economics showed Tuesday. The Caixin composite output index, which covers both manufacturing and services, dropped to 50.3 in June from 50.5 in May.

New orders for U.S. manufactured goods pulled back in line with estimates in the month of May, the Commerce Department revealed in a report released on Tuesday. The report said factory orders fell by 1.0 percent in May following a 1.8 percent jump in April. The drop in orders matched economist estimates.

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Source: Equities.com News (July 5, 2016 - 8:10 AM EDT)

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