The European markets ended Monday's session in positive territory. Banks and automakers were among the best performing stocks at the start of the new trading week, while mining stocks were weak. Morgan Stanley upgraded its rating on the European auto sector to "Overweight" from "Equal weight." Several European markets were closed for the Pentecost holiday. Investors will be watching for the release of the FOMC minutes on Wednesday and a speech from Chairman Ben Bernanke. Also later this week, ECB President Mario Draghi will be speaking on Thursday.
After Moody's, Fitch has also downgraded Slovenia's sovereign rating, suggesting that it will be next Eurozone nation to seek external aid. Moreover, Fitch warned that the rating will be lowered further if the recession goes deeper and longer than anticipated, or if policymakers fail to clean up the balance sheets of the banking sector.
Fitch cited significant deterioration in Slovenia's macroeconomic and fiscal outlook as the major reason for the rate cut. It has 'BBB+' rating, three notches above junk grade. Fitch forecasts a 2 percent contraction in real GDP in 2013 and a decline of 0.3 percent in 2014. The general government deficit will rise to 5 percent of GDP in 2013 from 4 percent in 2012, it said.
Cyprus has further relaxed restrictions on foreign banks that were imposed after the debt-laden country sought the $30 billion bailout.
Eight more foreign banks - the Bank of Beirut SAL, Banque SBA, Barclays Bank PLC, Banque BEMO SAL, BBAC SAL, Credit Libanais SAL, Jordan Ahli Bank plc and Privatbank - have now been excluded from control on transactions with international customers.
In the absence of effective resolution regimes, public finances will be under more pressure, Bank of England Deputy Governor Paul Tucker said Monday. The countries that resorted to bank bailout and without effective resolution system will possibly have higher government yield, policymaker said in a speech in Netherlands.
"Only with a credible mechanism to put losses to a failed bank's creditors can we harness the forces of market discipline and take tax payers off the hook," Tucker said.
He said, "only with powers and plans to resolve cross-border banking groups can we arrest the risk of national regulators progressively putting up barriers to cross-border finance."
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.18 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.16 percent.
The DAX of Germany climbed by 0.69 percent and the CAC 40 of France gained 0.54 percent. The FTSE 100 of the U.K. rose by 1.01 percent and the SMI of Switzerland was closed.
In Frankfurt, Commerzbank increased by 8.84 percent, while Deutsche Bank dipped by 0.05 percent.
BMW climbed by 3.02 percent, Volkswagen rose by 3.24 percent and Daimler added 2.59 percent.
Rheinmetall gained 3.94 percent, after Deutsche Bank upgraded the stock to ''Hold'' from ''Sell.''
Bilfinger Berger finished up by 0.78 percent. Merrill Lynch added the stock to its ''Most Preferred List.''
In Paris, STMicroelectronics gained 2.73 percent. JPMorgan reinitiated the stock with an ''Overweight'' rating.
Carmaker Renault climbed by 1.37 percent and Peugeot advanced by 5.85 percent.
Societe Generale increased by 2.08 percent. Credit Agricole and BNP Paribas rose by 1.73 percent and 0.46 percent respectively.
EDF gained 2.28 percent, following a ratings upgrade at Credit Suisse.
In London, Eurasian Natural Resources dropped by 2.76 percent. The miner rejected an acquisition offer from a consortium.
Fresnillo also decreased by 3.27 percent and Randgold Resources lost 1.28 percent. Anglo American fell by 1.08 percent and Antofagasta dipped by 0.96 percent.
Firstgroup plunged by 30.47 percent, after the company announced annual results.
Thomas Cook declined by 2.59 percent, after a broker downgrade.
Ryanair surged by 6.62 percent, after reporting full year results. Peer easyJet added 3.96 percent.
Royal Bank of Scotland climbed by 4.48 percent, after Numis upgraded the stock to ''Buy'' from ''Hold.''
United Utilities rose by 2.55 percent, after Goldman Sachs upgraded the stock to "Buy" from "Neutral."
The squeeze on British household budgets eased in May, as an indicator of personal finances showed its highest reading in three years despite straying in the negative territory, a report from Markit Economics showed Monday.
The headline Markit Household Finance Index rose sharply to 40.4 in May from 37.7 in April. Reading below 50 indicates contraction. However, Markit said, the latest reading pointed to the slowest deterioration in household finances since May 2010.
The fifth consecutive monthly increase in the U.K. house prices amid limited supply took average asking prices to a record, a survey by Rightmove showed Monday. House prices hit a record GBP 249,841 in May, as new sellers raised their prices by 2.1 percent from the prior month.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.