European Stocks Slide Following Spanish GDP Data

LONDON -- European stock markets have pushed into negative territory before the U.S. open Tuesday, losing ground after Spain posted a 0.4% fall in GDP from the previous quarter thanks to the government's austerity push and a slump in consumer spending. Earlier this morning the Spanish government successfully sold 1.67 billion euros in three-month bonds, with strong demand and favorable rates.

Meanwhile, much of the focus on the continent was focused on remarks made by Germany's European Central Bank representative, Joerg Asmussen, suggesting that the central bank would only intervene in parallel with action from the EU bailout funds and would buy only short-term debt. France's CAC 40 (INDEX: ^FCHI  ) is one of the weaker indexes today, down almost 0.9%.

As always, the following price moves are based on this morning's European trading.

German hospital operator Rhoen-Klinikum (NASDAQOTH: RKAGY.PK) is down more than 5% today after B. Braun Holding took a 5% stake in the company and a renewed takeover bid from Fresenius that was rumored to be coming through last week failed to materialize. In a statement, Braun said it purchased the stake because it trusts in the positive development of the German private-hospital market.

Elsewhere, Finnish phone maker Nokia (NYSE: NOK  ) is weighing heavily, down 4.5% on a spurt of profit-taking after yesterday's rally saw Nokia's stock rocket more than 11%. The stock had been boosted after a U.S. jury ruled that rival firm Samsung had breached a number of patents held by Apple. Nokia hopes to take advantage of the ruling when it launches its latest smartphone, which uses the Windows 8 operating system, in early September.

In Spain, the banking sector is continuing to see weakness, with added pressure following the GDP numbers and ongoing concerns that unprofitable lenders may be shut down thanks to new rules surrounding the country's banking bailout. Bankia (NASDAQOTH: BNKXF.PK) is once again leading losses, down 3.5% despite the EB's push for easing liquidity requirements and allowing certain banks to use asset-backed securities and business loans to buffer against further liquidity crunches.

On the upside, however, Italian bank UBI Banca (NASDAQOTH: BPPUY.PK) is up 4.4% today after it reported better-than-expected profits. The company said net income fell 71% in the second quarter to 54.2 million euros -- still far outstripping analyst estimates -- while trading profit in Q2 was 11 million euros, beating the 7 million euros posted a year earlier.

The bank said it benefited from a 74 million euro tax relief during the period, allowing it to pay 75 million euros in tax for Q2, while at the same time increasing loan loss provisions from 158 million euros a year earlier to 203 million euros. Despite these efforts, however, the company said that due to wider volatility in the markets, it will make no predictions for what it expects in the second half of the year.

As always, this morning's European news saw some winners and losers -- and perhaps some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying the stock of a prominent European large cap. If you want to know why Buffett has bought into Europe, this special Motley Fool report -- "The One European Share Warren Buffett Loves" -- reveals everything, including the price he paid. You can download the report today for free, but hurry -- the report is available for a limited time only.

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Karl Loomes does not own any share mentioned in this article. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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