European markets remained in a tight range Tuesday as investors maintained a cautious mode amid the revival of concerns of the debt burden faced by the euro zone with persisting financial instability in Greece and Spain.
The French CAC 40 index was down 0.16 percent or 5.58 points to 3477.67. Shares of Vallourec SA fell 0.92 percent and those of Sanofi declined 0.72 percent.
London’s FTSE 100 index marginally rose 0.03 percent or 1.49 points to 5884.40. Shares of AMEC PLC declined 0.45 percent and those of AstraZeneca PLC were down 0.34 percent.
The German DAX 30 index was marginally up 0.07 percent or 4.96 points to 7333.01. Shares of Allianz SE rose 0.31 percent and shares of Deutsche Post AG declined 0.16 percent.
Spain's IBEX 35 was up 0.11 percent or 8.60 points to 7885.70. Shares of Bankia SA rose 4.22 percent and those of Acciona SA dropped 0.77 percent.
Data published Monday by the Bank for International Settlements showed that banks in the core euro zone economies -- Germany, France, the Netherlands, Belgium, Austria and Finland -- reduced their exposures to the five major peripheral economies -- Italy, Spain, Greece, Portugal and Ireland -- by around 100 billion euros ($126 billion) in the second quarter.
“Needless to say, if banks continue to reduce their claims on the periphery it will probably make credit even harder to come by there and increase peripheral banks’ reliance on the ECB. And in a worst-case scenario it could even trigger a banking collapse,” Ben May, an economist at Capital Economics, said.
On a positive note, the risk of an imminent euro zone exit by Greece has declined with the progress made by the Greek government on meeting the conditions of its bailout. Investors are pinning their hopes on the ECB’s Outright Monetary Transactions program to prevent the contagion even if Greece leaves the euro zone.
To contact the editor, e-mail: