After strong gains during the previous sessions, European shares fell on Thursday after the dovish comments made by the head of the US Federal Reserve.
The index of the pan-European FTSEurofirst 300 index dropped to 0.9 percent from 1.3 in the previous session. Janet Yellen, the chair of the US Federal Reserve, had warned on increasing US interest rates that sustained stock markets around the world.
French Telecom was deemed to be among the worst performers in the stocks after Orange and Bouygues had extended their negotiations until Sunday on a possible sale of the Bouygues Telecom, stating that there is little progress ahead of their Thursday deadline.
Bouygues shares fell 3.9 percent, while Orange shares dropped 2 percent. The stocks of their rival French telecom also lost ground as they declined 2.4 percent. Numericable-SFR is also down 3.9 percent, and Altice dropped by 1 percent as well.
Rupert Baker, a European equity sales executive at Mirabaud Securities, said, “I was selling Bouygues yesterday. These bid talks often take longer than expected, and the longer they go on, there’s always a chance it could unravel.”
Stocks in Italian banks have also declined sharply. According to Reuters, guarantor UniCredit is thinking of whether to delay the Banca Popolare di Vicenza’s 1.76 billion euro rights issue if the conditions won’t improve by April.
The fund-raising is said to be an important test of investor confidence in Italian banks, whose stocks have been sold off strongly this year due to the growing concern about the 360 billion euros in bad loans that are seen on the balance sheets.
Luca Comi, an analyst at the ICBPI, said, “Investors fear that the recapitalization of Popolare di Vicenza may end up with a large portion of unsubscribed rights, forcing UniCredit to take up a great part of it.”