UPDATE 1-Mkts should watch bank data, stop casino game-Juncker

Mon Sep 29, 2008 7:29am EDT
 
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LUXEMBOURG, Sept 29 (Reuters) - The chairman of euro zone finance ministers called on financial markets on Monday to look at banks' fundamentals and stop playing a "casino game" with their shares.

Jean-Claude Juncker, also the prime minister of Luxembourg, was asked whether the part nationalisation of Dutch-Belgian bank Fortis (FOR.BR) and a new injection of liquidity into money markets by the European Central Bank would restore market confidence.

"I can only hope that confidence will come back -- financial markets should not forget to take a close look at the health of fundamental data of several banks -- and that this casino game, that's going on independently from the good fundamentals, stops," he told reporters on the sidelines of a meeting in parliament.

Belgian, Dutch and Luxembourg governments rescued Fortis over the weekend to prevent a domino-like spread of failure by buying its shares for 11.2 billion euros. But Fortis stocks still traded 9.2 percent lower at 1109 GMT.

Shares in Fortis rival Dexia (DEXI.BR) plunged 27.8 percent by 1109 GMT on a newspaper report it planned a capital increase and German property lender Hypo Real Estate HRXG.DE was down 70.1 percent after it secured an emergency credit line from a consortium of banks and a substantial government guarantee. (Reporting by Michele Sinner, writing by Jan Strupczewski, editing by Mike Peacock)

 
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