Investing.com - European stocks closed sharply lower Monday, as investors dumped equities due to growing fears that Spain will need a full-scale sovereign debt bailout and fresh concerns over a Greek exit from the euro zone.
At the close of European trade, the EURO STOXX 50 plunged 2.59%, France’s CAC 40 tumbled 2.89%, while Germany’s DAX 30 spiraled lower by 3.18%.
Knocking shares lower, yields on Spanish 10-year bonds rose to a record 7.57% on Monday, well above the 7% threshold widely considered unsustainable in the long term, amid growing fears that Spain will need a full bailout after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend.
Spanish media reported that several others among Spain's 17 semi-autonomous regions are expected to follow, including the two biggest regions, Catalonia and Andalucia.
Meanwhile, fears over a Greek exit from the euro zone resurfaced, amid worries whether Athens can meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
The news prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the dollar and U.S. Treasuries.
In Spain, the IBEX 35 index was down 3.3%. Shares in the nation’s largest lender Banco Santander lost 1.45%, BBVA dropped 3%, while Bankia shares plummeted 10.4%.
Elsewhere, Italy’s FTSE MIB 40 index sank 4% after the yield on Italian 10-year government debt rose to 6.41%. Intesa Sanpaolo shares plunged 8.3%, while Unicredit tumbled 4.75%.
Elsewhere across the sector, France’s BNP Paribas and Societe Generale fell 6% and 4.4% respectively, while Germany’s Deutsche Bank and Commerzbank lost 3.9% and 5.8% respectively.
On the upside, shares in consumer electronics manufacturer Royal Philips Electronics surged 6.25% after reporting better-than-expected second quarter net profit.
Second quarter revenue rose to EUR5.9 billion from EUR5.2 billion in the same period a year ago.
Elsewhere, in London, the commodity-heavy FTSE 100 slumped 1.75%, as miners came under pressure by the uncertain global outlook and by falling commodity prices.
Mining giants BHP Billiton and Rio Tinto lost 3.1% and 2.65% respectively, while shares in copper producers Xstrata and Anglo American declined 2.9% and 3.4% respectively.
Financials were lower as well, with Royal Bank of Scotland retreating 3.1%, Barclays falling 2.15% and Lloyds Banking Group losing 2%.
In the U.S., equity markets followed aggressively lower. The Dow traded off 1.11%, the S&P 500 plunged 1.41%, while the tech heavy Nasdaq gave back 1.85% in midsession trade.
Investors are looking forward to a talk by Ben Bernanke and Canadian core retail sales on Tuesday.
At the close of European trade, the EURO STOXX 50 plunged 2.59%, France’s CAC 40 tumbled 2.89%, while Germany’s DAX 30 spiraled lower by 3.18%.
Knocking shares lower, yields on Spanish 10-year bonds rose to a record 7.57% on Monday, well above the 7% threshold widely considered unsustainable in the long term, amid growing fears that Spain will need a full bailout after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend.
Spanish media reported that several others among Spain's 17 semi-autonomous regions are expected to follow, including the two biggest regions, Catalonia and Andalucia.
Meanwhile, fears over a Greek exit from the euro zone resurfaced, amid worries whether Athens can meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
The news prompted investors to shun riskier assets, such as stocks and commodities, and flock to traditional safe haven assets like the dollar and U.S. Treasuries.
In Spain, the IBEX 35 index was down 3.3%. Shares in the nation’s largest lender Banco Santander lost 1.45%, BBVA dropped 3%, while Bankia shares plummeted 10.4%.
Elsewhere, Italy’s FTSE MIB 40 index sank 4% after the yield on Italian 10-year government debt rose to 6.41%. Intesa Sanpaolo shares plunged 8.3%, while Unicredit tumbled 4.75%.
Elsewhere across the sector, France’s BNP Paribas and Societe Generale fell 6% and 4.4% respectively, while Germany’s Deutsche Bank and Commerzbank lost 3.9% and 5.8% respectively.
On the upside, shares in consumer electronics manufacturer Royal Philips Electronics surged 6.25% after reporting better-than-expected second quarter net profit.
Second quarter revenue rose to EUR5.9 billion from EUR5.2 billion in the same period a year ago.
Elsewhere, in London, the commodity-heavy FTSE 100 slumped 1.75%, as miners came under pressure by the uncertain global outlook and by falling commodity prices.
Mining giants BHP Billiton and Rio Tinto lost 3.1% and 2.65% respectively, while shares in copper producers Xstrata and Anglo American declined 2.9% and 3.4% respectively.
Financials were lower as well, with Royal Bank of Scotland retreating 3.1%, Barclays falling 2.15% and Lloyds Banking Group losing 2%.
In the U.S., equity markets followed aggressively lower. The Dow traded off 1.11%, the S&P 500 plunged 1.41%, while the tech heavy Nasdaq gave back 1.85% in midsession trade.
Investors are looking forward to a talk by Ben Bernanke and Canadian core retail sales on Tuesday.