Europe Markets

European stocks end the day flat; Deutsche Bank shares up after DoJ settlement

A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany, September 30, 2016.
Kai Pfaffenbach | Reuter

European markets closed around the flat line Friday as trading desks began to thin out in a shortened trading day for some major bourses.

The FTSE100 ended 0.06 percent higher as the U.K.'s market closed at 12.30 p.m London time. Germany's DAX30 was down 0.05 percent while France's CAC40 index was up 0,5 higher.

The pan-European Stoxx 600 ended the day up 0.02 percent higher. Banking stocks slipped to negative territory having moved higher after a raft of overnight legal news.

Bank news bonanza

European markets tread water ahead of holidays despite banking woes

Deutsche Bank was close to the top of the leaderboard, moving around 3.4 percent higher, after its Friday pre-open announcement that it had agreed to pay $7.2 billion to settle an investigation led by the U.S.'s Department of Justice into alleged mis-selling of mortgage securities (MBS).

This as Credit Suisse gave up gains to close 0.7 percent lower on Friday morning after revealing that it had reached a deal with U.S. authorities to settle claims for its role in mis-selling MBS. The Swiss lender was asked to drum up a total $5.7 billion. The Zurich-based bank said it would take a pre-tax charge of about $2 billion to pay for the settlement.

Meantime, U.K. bank Barclays closed 0.3 percent lower on news it is being sued by federal prosecutors for allegedly fraudulent MBS issued during the frothiest peaks of the U.S. housing bubble.

Following the Italian government revealing early Friday that it had approved the creation of a 20 billion-euro ($20.9 billion) rescue fund for troubled banks, the country's banking sector moved around 1.7 percent higher. This as shares, derivatives and ten-year bonds in the beleaguered lender Banca Monte dei Paschi di Siena (BMPS) were suspended on Friday. The bank is set to be the first recipient of the state fund after BMPS's hopes to raise private capital failed on Thursday evening.

In Germany, the suspect in the Berlin Christmas market truck attack was killed in a shoot-out in a suburb of the Italian city of Milan. Italy's interior minister, Marco Minniti, told reporters at a press conference shortly afterwards that "without any shadow of a doubt" it was the man that was wanted for the attack, 24 year old Tunisian Anis Amri.

Elsewhere in Europe, an airliner of an internal flight in Libya was hijacked and diverted to Malta where it landed on Friday morning, according to Reuters. Two hijackers had threatened to blow up the Airbus A320 which had 118 people board, the Times of Malta reported.

The Office of National Statistics (ONS) revised its estimate for U.K. gross domestic product (GDP) upwards for the three months following the country's vote to leave the European Union. The ONS indicated that the U.K. grew by 0.6 percent for the third quarter of 2016 rather than 0.5 percent as previously estimated.

Oil prices slipped below $55 dollars a barrel on Friday as a strengthening U.S. dollar hampered a bullish run for commodities before the Christmas break and higher Libyan output threatened the production cuts by OPEC and non-OPEC members.

Brent crude traded at around $55.18 a barrel on Friday, up 0.11 percent, while U.S. WTI was around $52.99 a barrel, up almost 0.1 percent.

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