Investing.com - European stocks opened sharply lower on Monday, as fresh speculation over a potential rate hike by the Federal Reserve this month weighed on global equities.
During European morning trade, the EURO STOXX 50 lost 1.75%, France’s CAC 40 retreated 1.72%, while Germany’s DAX 30 tumbled 1.79%.
European equities weakened after Boston Fed President Eric Rosengren said on Friday that the U.S. economy has proven to be more resilient to exogenous risks and that "gradual tightening is likely to be appropriate."
The comments sparked fresh speculation over a potential rate hike in the near future.
Market participants were looking ahead to a speech from FOMC voting member Lael Brainard due later on Monday for further hints on a potential rate hike.
Financial stocks were broadly lower, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) plummeted 2.25% and 2.19%, while Germany’s Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn) lost 1.59% and 2.45%.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) tumbled 2.49% and 3.08% respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) declined 2.65% and 2.88%.
Elsewhere, E.ON SE NA (DE:EONGn) sank 13.63% as Uniper, the power generation and energy trading business being spun off by the German utility, was due to start trading in Frankfurt.
Linde AG (DE:LING) added to losses, with shares down 7.91% as merger talks with Praxair (NYSE:PX) ended.
In London, FTSE 100 tumbled 1.37%, weighed by Associated British Foods (LON:ABF), whose shares plunged 4.82% even as the company said on Monday that it was raising its full-year earnings outlook.
U.K. lenders were also broadly lower, as HSBC Holdings (LON:HSBA) lost 1.83% and Lloyds Banking (LON:LLOY) plummeted 2.44%, while Barclays (LON:BARC) and the Royal Bank of Scotland (LON:RBS) plunged 2.56% and 3.17% respectively.
Mining stocks added to losses on the commodity-heavy index. Shares in Rio Tinto (LON:RIO) declined 3.16% and Glencore (LON:GLEN) tumbled 3.52%, while Anglo Americam dove 3.84% and BHP Billiton (LON:BLT) sank 4.49%.
SABMiller (LON:SAB) was the only rising stock on the index, as it added 0.22%.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.53% drop, S&P 500 futures showed a 0.52% loss, while the Nasdaq 100 futures indicated a 0.63% decline.