By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- New, tougher sanctions on Russia weighed
on European stock markets on Wednesday as investors analyzed the
potential consequences of the measures. Spanish stocks, however,
stood out as outperformers after better-than-expected growth data
for the country.
Sanction details: Both the U.S. and the European Union agreed to
expand sanctions on Russia late Tuesday, with the new restrictions
targeting the Russian energy, defense, and finance sectors. In the
financial sector, the EU is now curbing access to financing for
state-owned banks in Russia, while it will stop exporting specific
goods and technologies to the country to make it more difficult to
develop oil resources over the longer term.
The U.S. Treasury also said it will ban American citizens from
buying new stocks or bonds from three major Russian financial
institutions, limiting their access to U.S. capital markets. The
three banks are Bank of Moscow , Russian Agricultural Bank, and VTB
Bank .
Data: Spain surprised with some better-than-expected
second-quarter economic growth data on Wednesday. The economy
expanded by 0.6% in three-month period, exceeding an estimate
released last week by the country's central bank and marking the
strongest growth rate in six years.
Meanwhile, another data release showed Spanish consumer prices
dropped in July for a second month in a row, stoking fears of a
sustained period of deflation.
In France, consumer confidence stagnated in July, staying well
below the long-term average.
Market reactions: Most country-specific indexes were mired in
the red and the Stoxx Europe 600 index fell 0.1% to 342.08.
France's CAC 40 index lost 0.1% to 4,363.57, and Germany's DAX 30
index was slightly lower at 9,650.14. The U.K.'s FTSE 100 index was
marginally higher at 6,809.73, supported by Barclays PLC after the
bank posted upbeat earnings.
Spain's IBEX 35 index climbed 0.5% to 10,950.90 on the back of
the encouraging growth data.
Russia's MICEX index rallied 2.3% to 1,400.75, shrugging off the
new sanctions. Naeem Aslam, chief market analyst at AvaTrade,
explained that the European leaders made a clever choice in their
measures by leaving out the gas sector, which helped push up the
Russian index.
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