(Adds futures, details, company news; updates snapshot table)
PARIS, July 18 (Reuters) - European stock index futures pointed to a lower open on Monday, as results from the bank stress tests failed to dispel investors' concerns over the potential impact from the region's sovereign debt crisis.
By 0621 GMT, futures for Euro STOXX 50 <STXEc1>, for Germany's DAX <FDXc1> and for France's CAC <FCEc1> were down 0.7-0.9 percent.
Results released after Europe's closing bell on Friday showed that eight banks have failed a test about their ability to withstand a long recession and will have to raise about 2.5 billion euros in capital, significantly less than expected.
Expectations were for five to 15 banks to fall short and that they would need to raise 10 billion euros or more in capital, prompting analysts to question the credibility of the test. [ID:nL6E7IF19G]
"The EBA (European Banking Authority) was in a lose-lose situation. Too few failures and the test is branded too lenient; too many failures and some will worry that the system is in worse shape than expected," Societe Generale analysts wrote in a note.
"The European banking sector is captive to politics at the moment. A political error can trigger a freeze in money markets, and a liquidity crisis could quickly turn into a solvency crisis. Only improved governance would avoid such a nasty scenario," they wrote.
On Sunday, German Chancellor Angela Merkel called for private investors to make a major contribution to bailing out Greece, as pressure intensified for decisive action to reduce the country's debt burden. Euro zone leaders are due to meet on Thursday to discuss the Greek rescue.
Separately, Germany's Die Welt newspaper, citiing diplomatic sources, reported euro zone governments are considering a banking levy as a way to involve private creditors in a Greek rescue. [ID:nLDE76G09D]
The European banking sector index <.SX7P> is stuck in a downward channel since mid-February, in which it has tumbled about 25 percent, dragging its 12-month forward price-to-earnings ratio (P/E) to 7.5, a level not seen since March 2009.
"The reason the markets aren't flying is that we keep on coming back to the fact they didn't stress the sovereign defaults. They only stressed the trading book. The trading book is about 20 pct of the total sovereign holdings," Mediobanca analyst Christopher Wheeler said.
"If Greece does default, (many of the banks are) obviously going to take a much bigger hit than the stress test has shown."
The European Central Bank's chief said it could not accept defaulted bonds as collateral and that governments would have to intervene and correct things were Greece government debt to be rated as a default.
Jean-Claude Trichet, in the interview with Financial Times Deutschland conducted on July 14, criticised euro zone governments for their crisis management in the bloc's sovereign debt crisis, saying they needed more discipline. [ID:nLDE76G08C]
The euro zone's blue-chip Euro STOXX 50 <.STOXX50E> index tumbled 4.1 percent last week, and on Friday hit its lowest closing level since November, hit by mounting worries of a Greek debt default and contagion to other euro zone countries.
----------------------MARKET SNAPSHOT AT 0623 GMT----------------------
LAST PCT CHG NET CHG S&P 500 <.SPX> 1,316.14 0.56 % 7.27 MSCI ASIA EX-JP <.MIASJ0000PUS> 563.47 -0.54 % -3.08 EUR/USD <EUR=> 1.4065 -0.34 % -0.0048 USD/JPY <JPY=> 78.99 -0.09 % -0.0700 10-YR US TSY YLD <US10YT=RR> 2.906 -- 0.00 10-YR BUND YLD <EU10YT=RR> 2.668 -- -0.04 SPOT GOLD <XAU=> ${esc.dollar}1,596.36 0.19 % ${esc.dollar}3.06 US CRUDE <CLc1> ${esc.dollar}97.25 0.01 % 0.00 -----------------------------------------------------------------------
Gold shines on a gloomy day as risk aversion spreads [ID:nL3E7II032]
Google lifts Wall St in otherwise rough week [ID:nN1E76E1LX]
FOREX-Euro, US dollar destiny hinges on debt crises [ID:nN1E76E1Q8]
Gold hits new high of ${esc.dollar}1,597.71 /oz on debt concerns [ID:nS9E7HK01Z]
LME copper ticks up; economy, debt woes cap gains [ID:nL3E7II0B4]
Brent crude falls on U.S., Europe debt worries [ID:nL3E7II0AN]
COMPANY NEWS:
SPANISH BANKS
Five of the eight banks that failed Europe-wide stress tests late Friday were Spanish. A further seven Spanish banks just scraped a pass mark. The Bank of Spain governor and the Economy Minister said no banks needed to raise capital. The head of the European Banking Authority told El Pais in an interview that Spain had undertaken a formidable exercise in transparency and would not be attacked by markets as a consequence of the tests. [ID:nLDE76G040]
PHILIPS <PHG.AS>
The group surprised with a 1.3 billion euro quarterly net loss, citing a slower-than-expected recovery from the recession and impairment charges, and said it will cut costs by 500 million euros. [ID:nLDE76E0DU]
BANCO POPOLARE <BAPO.MI>
The cooperative bank is reorganising its operations in a move which will boost its net profit by 90 million euros (${esc.dollar}127.3 million) a year when fully-implemented, it said on Friday. [ID:nLDE76E1ES]
CREDIT SUISSE <CSGN.VX>
U.S. authorities are considering indicting Credit Suisse over its role in providing offshore private banking services that enabled scores of wealthy Americans to evade taxes, according to current and former senior government sources briefed on the matter. [CSGN.VX-E]
DEUTSCHE BOERSE <DB1Gn.DE>
Deutsche Boerse shareholders representing some 82.4 percent of voting rights backed its ${esc.dollar}9 billion merger with NYSE Euronext <NYX.N>, according to a final count, the German exchange operator said on Friday. It also said an additional acceptance period would run from July 19 until Aug.1. [ID:nN1E76E16C]
FRANCE TELECOM <FTE.PA>
The telecom operator is weighing a bid for the fourth-largest mobile operator in the Democratic Republic of the Congo, as part of its effort to expand in fast-growing markets in the Middle East and Africa. [ID:nLDE76G059]
EADS <EAD.PA>
American Airlines, which once pledged loyalty to Boeing Co <BA.N>, has let Airbus <EAD.PA> back into the room for negotiations on a potentially huge contract that could have far-reaching implications for the plane makers as well as the third-largest U.S. airline. [ID:nN1E76E1D2]
PSA PEUGEOT CITROEN <PEUP.PA>
A joint venture between PSA Peugeot Citroen <PEUP.PA> and China's Changan to make and distribute cars and light commercial vehicles got the go-ahead from Chinese authorities, the French car maker said on Monday. [ID:nWEB0172]
PUBLICIS <PUBP.PA>
The company said it would buy a 51 percent stake in Big Fuel, a New York-based advertising agency specialised in social media, for an undisclosed amount.
(Additional reporting by Christian Plumb) (Reporting by Blaise Robinson)
Our Standards: The Thomson Reuters Trust Principles.
