Europe’s main stock markets dropped yesterday, in the wake of losses in Asia, but Standard Chartered shares rose after the bank agreed a US fine over claims it helped Iranian firms bypass US sanctions.

In London, the benchmark FTSE 100 index of leading companies fell by 0.54% to close at 5,833.04 points while Frankfurt’s DAX 30 gave up 0.40% to 6,946.80 points.

In Paris the CAC 40 edged lower, though by an insignificant 0.03%, to 3,449.20 points as the country marked a holiday.

Milan was closed for the holiday, while Madrid added a very slight 0.06%.
The market rate on 10-year Spanish bonds eased meanwhile, with yields at 6.642%, compared with 6.732% at the end of trading on Tuesday.

The comparable rate on Italian 10-year debt declined to 5.768% from 5.831%.
The relatively few bond markets traders active this week expect Spain to apply for European financial aid, easing the amount of risk weighing on its debt.

In foreign exchange deals, the European single currency slipped to $ 1.2288 from $ 1.2321 late on Tuesday in New York.

On Wall Street, US stocks were mixed after economic data failed to confirm any new spark for the economy.

The blue-chip Dow Jones Industrial Average was down 0.08% at 13,161.92 points in midday trades.

The broader S&P 500-stock index was 0.09% higher at 1,405.26 points while the tech-rich Nasdaq gained a more substantial 0.34% to 3,027.36 points.

New US data showed that inflation was flat and that national industrial production grew 0.6% month on month in July, mainly driven by the automotive sector.

Manufacturing in the New York area posted a surprise drop however.
The National Association of Homebuilders’ activity index rose by two points to 37 - still low, but the highest level since early 2007, indicating greater optimism among companies that build housing.

In Europe meanwhile, “the markets are suffering the usual lack of volatility associated with August,” noted Alpari UK analyst Craig Erlam.

“There is also likely to be a lot of cautious trading over the coming weeks with people waiting for the next move from the eurozone,” he added.

A notable exception was shares in Standard Chartered bank, which jumped by 4.25% to 1,428.2 pence.

The bank’s stock price had plunged on August 7, closing down almost 17% to 1,223.57 pence, after New York state regulators accused it of hiding transactions with Iranian banks.
It quickly rebounded in subsequent days, however.

Standard Chartered said late Tuesday that it had agreed to pay a fine of $ 340mn to the state regulator following allegations that it hid 60,000 transactions with proscribed Iranian clients worth $ 250bn over 10 years.

“Standard Chartered’s battle with the regulators appears to be over for now,” said Chris Beauchamp, market analyst at IG Index traders.

Official data yesterday showed that US retail sales rose by a better-than-expected 0.8% in July, breaking a three-month losing streak and offering hope of faster growth in the third quarter.

The retail figures may have disappointed some investors who were hoping that more poor data would spur the US Federal Reserve into new stimulus measures, analysts said.
Expectations of US action, along with hints from the European Central Bank that it would resume a controversial bond-buying programme, have helped drive solid gains in stocks this month.

Rabobank strategist Jane Foley noted that in Europe, “the markets continue to focus very much on the fiscal positions in Greece and Spain.”

The US data released yesterday showed a 0.6% gain in US industrial output in July, while consumer prices were stable with 12-month inflation at 1.4%.