Investing.com - European stocks closed sharply lower Monday, led by the financial sector after Spain officially requested financial aid and as ongoing euro zone debt concerns weighed on investor confidence ahead of a key European summit later in the week.
At the close of European afternoon trade, the EURO STOXX 50 tumbled 2.57%, France’s CAC 40 plunged 2.24%, while Germany’s DAX 30 plummeted 2.09%.
Equity sentiment weakened ahead of an EU summit due to begin on Thursday, amid growing doubts over whether leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt.
Meanwhile, fears that the debt crisis in the euro area is creating a drag on global growth continued to weigh, following a string of data last Thursday which pointed to weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity across the single currency bloc.
Earlier Monday, Spain’s government formally requested aid of up to EUR100 billion for its banking sector from its euro zone partners. Spain’s economy minister said the amount should be enough to cover the needs of all banks and provide an additional security buffer.
Financial stocks extended earlier losses, led by Italian lender Unicredit, down 3.95%, while Spain’s BBVA and Banco Santander tumbled 2.58% and 2.11% respectively.
France’s Societe Generale and BNP Paribas were also sharply lower, with shares plunging 2.08% and 2.72%, while Germany’s two biggest lenders, Deutsche Bank and Commerzbank, plummeted 2.38% and 1.14%.
BNP Paribas and Deutsche Bank were among the 15 global banks downgraded last Thursday by Moody’s ratings agency, due to their “significant exposure to the volatility and risk of outsized losses inherent to capital markets activities.”
Nokia saw shares dive 7.25%, after chief executive Stephen Elop announced that the company’s Salo factory, in Finland, Europe’s last major mobile phone factory, will have to close. The move will claim about 850 jobs, in addition to the 1,000 announced earlier in the year, and rob the town of 90% of its tax revenue.
In London, commodity-heavy FTSE 100 dropped 1.14%, weighed by sharp losses mining stocks.
Mining giants Rio Tinto and Bhp Biliton continued to tumble, down 1.50% and 1.20% respectively, after UBS downgraded earnings estimates for both companies by 4% due to Australia’s mining and carbon taxes.
Copper producers also remained on the downside, as shares in Xstrata declined 1.26% and Kazakhmys dropped 0.95%.
Meanwhile, U.K. lenders tracked their European counterparts lower. Shares in Barclays plunged 1.31 and the Royal Bank of Scotland slumped 1.25%, while Lloyds Banking and HSBC Holdings retreated 1.12% and 0.05% respectively.
Elsewhere, shares in Irish airline company Aer Lingus Group surged 1.40% after the Sunday Business Post reported that Turk Hava Yollari AO, or Turkish Airlines, may bid for the Irish government’s 25% stake in the airline or make a joint offer with another carrier.
In the U.S., equity markets followed sharply lower with the Dow Jones Industrial Average down 1.26%, S&P 500 futures off 1.90%, while the Nasdaq plunged 2.15%.
The Commerce Department said new home sales rose 7.9% to a seasonally adjusted 369,000 units in May, the highest rate since April 2010 and outstripping expectations for a gain of 0.6% to 346,000. New home sales for April totaled 343,000 units.
Investors are anticipating U.S. CB consumer confidence and New Zealand’s trade balance on Tuesday.
At the close of European afternoon trade, the EURO STOXX 50 tumbled 2.57%, France’s CAC 40 plunged 2.24%, while Germany’s DAX 30 plummeted 2.09%.
Equity sentiment weakened ahead of an EU summit due to begin on Thursday, amid growing doubts over whether leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt.
Meanwhile, fears that the debt crisis in the euro area is creating a drag on global growth continued to weigh, following a string of data last Thursday which pointed to weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity across the single currency bloc.
Earlier Monday, Spain’s government formally requested aid of up to EUR100 billion for its banking sector from its euro zone partners. Spain’s economy minister said the amount should be enough to cover the needs of all banks and provide an additional security buffer.
Financial stocks extended earlier losses, led by Italian lender Unicredit, down 3.95%, while Spain’s BBVA and Banco Santander tumbled 2.58% and 2.11% respectively.
France’s Societe Generale and BNP Paribas were also sharply lower, with shares plunging 2.08% and 2.72%, while Germany’s two biggest lenders, Deutsche Bank and Commerzbank, plummeted 2.38% and 1.14%.
BNP Paribas and Deutsche Bank were among the 15 global banks downgraded last Thursday by Moody’s ratings agency, due to their “significant exposure to the volatility and risk of outsized losses inherent to capital markets activities.”
Nokia saw shares dive 7.25%, after chief executive Stephen Elop announced that the company’s Salo factory, in Finland, Europe’s last major mobile phone factory, will have to close. The move will claim about 850 jobs, in addition to the 1,000 announced earlier in the year, and rob the town of 90% of its tax revenue.
In London, commodity-heavy FTSE 100 dropped 1.14%, weighed by sharp losses mining stocks.
Mining giants Rio Tinto and Bhp Biliton continued to tumble, down 1.50% and 1.20% respectively, after UBS downgraded earnings estimates for both companies by 4% due to Australia’s mining and carbon taxes.
Copper producers also remained on the downside, as shares in Xstrata declined 1.26% and Kazakhmys dropped 0.95%.
Meanwhile, U.K. lenders tracked their European counterparts lower. Shares in Barclays plunged 1.31 and the Royal Bank of Scotland slumped 1.25%, while Lloyds Banking and HSBC Holdings retreated 1.12% and 0.05% respectively.
Elsewhere, shares in Irish airline company Aer Lingus Group surged 1.40% after the Sunday Business Post reported that Turk Hava Yollari AO, or Turkish Airlines, may bid for the Irish government’s 25% stake in the airline or make a joint offer with another carrier.
In the U.S., equity markets followed sharply lower with the Dow Jones Industrial Average down 1.26%, S&P 500 futures off 1.90%, while the Nasdaq plunged 2.15%.
The Commerce Department said new home sales rose 7.9% to a seasonally adjusted 369,000 units in May, the highest rate since April 2010 and outstripping expectations for a gain of 0.6% to 346,000. New home sales for April totaled 343,000 units.
Investors are anticipating U.S. CB consumer confidence and New Zealand’s trade balance on Tuesday.