Lender shares surge on change in code

LONDON - Agence France-Presse

Europe’s main stock markets fell yesterday as investors took profits from big gains last week, but bank shares surged after a top rule-setting body said it would relax its asset requirements for the sector.

At the beginning of the first full trading week in 2013, London’s benchmark FTSE 100 index of top companies dipped 0.30 percent to 6,071.75 points, Frankfurt’s DAX 30 index dropped 0.37 percent to 7,747.19 points and the Paris CAC 40 fell 0.37 percent to 3,716.04.

The euro nudged down to $1.3043, which compared with $1.3067 late in New York on Friday. Gold prices firmed to $1,653.96 per ounce on the London Bullion Market, from $1,648.

“European markets have come into a consolidation phase,” said analyst Anita Paluch at trading firm Gekko Global Markets.

“Investors booked profits after last week’s strong gains, though banking shares gained as the Basel Committee watered down the drastic measures and extended the deadline for banks to create the buffer by four years.

“There is little inspiration on the economic front today and the European Central Bank meeting on Jan. 10 will be definitely eyed.” Equities had rallied sharply last week in holiday-shortened trade after U.S. lawmakers clinched a deal to avert a much-feared “fiscal cliff” of drastic tax rises and automatic spending cuts.

Over the weekend, meanwhile, the Basel Committee on Banking Supervision announced it would give banks and financial institutions more time to meet global liquidity rules scheduled to begin in 2015.

The rules are aimed at improving the banking sector’s ability to survive any future financial crises. The Basel committee - the world’s top banking regulatory body - said over the weekend that it would relax the severity of new rules which will require them to increase their holdings of assets that can be sold quickly in times of stress.