Investing.com - European markets opened sharply lower on Monday, taking their lead from U.S. and Asian equities and amid fresh concerns over German political tensions.
The EURO STOXX 50 declined 0.95%, France’s CAC 40 retreated 0.98%, while Germany’s DAX 30 was down 0.83% by 03:40 a.m. ET (07:40 GMT).
Markets were jittery after coalition negotiations between German Chancellor Angela Merkel's conservative party and the Social Democrats broke down over the weekend.
However SPD members said that progress had been made and that the two groups are set to resume talks on Monday.
Financial stocks were broadly lower, as French lenders Societe Generale (PA:SOGN) and BNP Paribas (PA:BNPP) tumbled 1.02% and 0.82%, while Germany's Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn) lost 1.40% and 1.38%.
Deutsche Bank remained under pressure after reporting on Friday a net loss of about €497 million euros for 2017, which was also its third consecutive annual loss.
Among peripheral lenders, Italy's Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) declined 1.12% and 1.90% respectively, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) retreated 0.96% and 1.18%.
Lufthansa added to losses, with shares down 2.02%. The German airlines said on Sunday that it plans to replace top management at Brussels Airlines, citing the unit’s weak performance compared to other divisions.
In earnings news, Sandvik posted better than expected fourth-quarter core profit on Monday, sending shares in the Swedish engineering group up 0.50%.
In London, FTSE 100 tumbled 1.26%, as UK lenders followed their European counterparts lower.
HSBC Holdings (LON:HSBA) dropped 0.73% and Lloyds Banking (LON:LLOY) lost 1.02%, while Barclays (LON:BARC) tumbled 1.30% and the Royal Bank of Scotland (LON:RBS) plummeted 1.36%.
Capita PLC (LON:CPI) was one of the top performers of the index, with shares surging 6.22% as they continued to recover from last week's sharp losses posted after the company on Wednesday issued a profit warning for 2018.
Mining stocks were mixed on the commodity-heavy index. Shares in Glencore (LON:GLEN) gained 0.41% and Anglo American (LON:AAL) advanced 0.58%, while BHP Billtion and Rio Tinto (LON:RIO) declined 0.51% and 0.80% respectively.
In other news, a fresh round of Brexit talks were set to begin on Tuesday. Ahead of the discussions, UK Home Secretary Amber Rudd said the U.K. government wouldn't "surrender too quickly" in its battle for a bespoke trade deal with the European Union.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.54% drop, S&P 500 futures signaled a 0.33% slide, while the Nasdaq 100 futures indicated a 0.23% fall.