By Rebekah Curtis
LONDON, June 3 (Reuters) - The pan-European FTSEurofirst 300
<> index was flat early on Tuesday as ongoing credit
concerns rattled banks, but Royal Bank of Scotland forged higher
on talk of a stake-build and a successful rights issue.
"Markets still remain pretty volatile," said Henk Potts,
equity strategist at Barclays Stockbrokers.
"There's still concern about the fact that the credit crunch
continues to claim victims ... and concern about the fact that
the economic outlook looks as if it's deteriorating."
The FTSEurofirst 300 was flat at 1,319.09 at 0908 GMT.
Britain's FTSE 100 was up 0.2 percent, however, as Royal
Bank of Scotland (RBS) <RBS.L> jumped 5.6 percent, but other UK
banks staged a mixed performance.
RBS gained as traders cited talk of stake building by
British activist fund The Children's Investment Fund. RBS
declined to comment, while TCI was not immediately available for
comment.
Irish banks dominated Europe's downside, however, falling
sharply as they reacted to this week's renewed credit concerns
after the Irish market closed on Monday for a public holiday.
Bank of Ireland <BKIR.I> slumped 8.3 percent, while Allied
Irish Bank <ALBK.I> lost 4 percent, and Anglo Irish Bank
<ANGL.I> dropped 8.2 percent, catching up to Monday's
announcement of a profit warning and discounted rights issue
from British mortgage lender Bradford & Bingley <BB.L>.
B&B shed 5.6 percent, while the DJ European Stoxx 600 bank
index <.SX7P> eased 0.4 percent.
"We thought there was glimmer of light on the horizon.
They'd drawn a line under the problems, identified the holes and
knew what amount of gravel they needed to fill the holes,"
Justin Urquhart Stewart, a director at Seven Investment
Management, said of the banking sector.
"What we did not anticipate is the hole getting bigger, and
the cost of gravel has gone up," he added.
Airline Ryanair <RYA.I> was a big gainer in Europe, up 5.9
percent after posting a 20 percent rise in adjusted full-year
net profit. It warned, however, that if oil prices stayed at
around $130 a barrel, it would expect only to break even in the
year ahead. []
Chipmaker Infineon <IFXGn.DE> advanced 3.4 percent, topping
the DAX leaderboard and outperforming the DJ Stoxx European
technology index <.SX8P>, after the company's new CEO unveiled
his strategy.
Dutch office goods supplier Corporate Express <CXP.AS> rose
7.2 percent after U.S. rival Staples <SPLS.O> raised its
all-cash bid for the company to 1.7 billion euros ($2.65
billion), increasing its chances of winning control.
Germany's K+S <SDFG.DE> added 7.6 percent after raising its
profit forecast. []
(Additional reporting by Dominic Lau and Michael Taylor,
editing by Will Waterman)
