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The European market open slightly higher today but then headed lower. Investors gave European banks the benefit of the doubt over stress tests. Skepticism still lingered over the assessment that the seven banks that failed had a combined capital shortfall of 3.5 billion euros -- much smaller than expected.
The tests revealed more transparency from Spanish banks needing to raise capital, than from German banks cagey about sovereign debt. The German DAX saw moderate gains in early trading as markets across Europe had their first chance to react to last Friday's test results. But a senior strategist at a brokerage firm in London says markets won't pay much attention to the EU stress tests. He also welcomes the anticipated replacement of Tony Hayward as CEO of BP.
Howard Wheeldon, Senior Strategist of BGC Partners said "They needed a new man at the helm. They appear to have done it just before second quarter results for the purpose of ensuring that markets know that Bob Dudley is in the seat. He is the one, as an American, who will lead the company forward for the next few years and they seem fairly content with that, so we've got a 24-hour bedding in period here. I think it's a pretty sensible move."