Fingers crossed after this news release: Europe stress relief...

Fingers crossed after this news release:

Europe stress relief rally fizzles after Ifo disappoints 2 Mins Ago CNBC.com 19 SHARES 2 COMMENTSJoin the Discussion Europe's stock markets turned flat in morning trade after a closely-watched German economic report came in weaker than expected, putting the brakes on a relief rally over the results of a key health check on the region's banks. The FTSEurofirst 300 was down 0.04 percent after a little more than one hour of trade, erasing some of the earlier gains. A report by the influential Ifo think tank showed German business sentiment darkened in October, hitting its lowest level in almost two years. "German business confidence dropped for the sixth month in a row in October, illustrating the euro zone's biggest economy has reached a dangerous stage between soft spell and longer-lasting almost-stagnation," Carsten Brzeski, chief economist at ING-DiBa said. How reassured do you feel about European banks after the stress tests? Not at all Slightly Very VOTEVote to see results The broader banking sector, which was up in opening trade, retreated after the data. Monte dei Paschi di Siena, which has the biggest capital shortfall and will need to raise a further 2.1 billion euros, came under pressure. The stock was down 15.15 percent. While 25 of the euro zone's biggest banks didn't have enough capital to withstand a series of potential financial shocks at the end of last year, in stress tests run by the European Central Bank (ECB), most have since raised enough capital or sold off enough assets to repair their balance sheets, the ECB said on Sunday. Banks in focus in Monday's trading included most of the Italian lenders, after nine failed stress tests. Some of the larger banks which narrowly passed the tests include Italy's Mediobanca and UniCredit. Banco Popolare rose 5.6 percent as investors breathed a sigh of relief. The broader banking sector rose 2 percent. Spain's banks were broadly higher, and Austrian banks Erste Bank and Raiffeisen also saw strong gains, with the former up over 7 percent and the latter gaining almost 5 percent. The U.K.'s Lloyds Banking Group was down 1.6 percent after it narrowly passed the test. "We think the outcome of the ECB's Comprehensive Assessment is positive for the European banking sector. We believe bank spreads in Europe will continue to tighten and lending conditions and credit constraints should ease, especially in the periphery," analysts at Barclays said.