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European stocks drop on French banks; DAX slumps 0.5%

Published 06/15/2011, 05:05 AM
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Investing.com – European stock markets were broadly lower on Wednesday, amid ongoing uncertainty over Greece’s sovereign debt crisis, while shares in French lenders declined after Moody’s placed their ratings under review.

During European morning trade, the EURO STOXX 50 slumped 0.6%, France’s CAC 40 shed 0.45%, while Germany's DAX 30 declined 0.5%.

Euro zone finance ministers failed to reach an agreement on a second Greek bailout plan on Tuesday, adding to investors’ nervousness over the country’s debt crisis ahead of a vote on austerity measures by Greek lawmakers later in the day.  

Meanwhile, shares in France’s largest lender BNP Paribas fell 1.8%, Societe Generale slumped 1.65% and Credit Agricole dropped 1.4% after ratings agency Moody’s said it was to place their ratings under review, citing their exposure to Greek debt.

Other major European banks were also down, with Unicredit falling 1.75%, Banco Santander sliding 1.6% and Deutsche Bank retreating 1.1%.

Shares in Swedish-based clothing retailer Hennes & Mauritz slumped 2.25% after reporting a 2% gain in same-store sales in May, below expectations for a 5.4% increase, as the sharp appreciation of the Swedish krona weighed on results. 

In London, the commodity-heavy FTSE 100 shed 0.35% as shares in commodities trader Glencore International slumped 1.9%, extending sharp losses from the previous session.

The company released a statement saying it was not in “active consideration of an offer" for Eurasian Natural Resources. Eurasian shares dipped 0.4%.

Shares in the financial sector were also lower, with Barclays dropping 1.9%, Royal Bank of Scotland declining 1.55%, while HSBC Holdings slipped 1.2%.

Earlier Tuesday, official data showed that the number of people claiming unemployment benefits in the U.K. rose by 19,600 in May, significantly higher than expectations for a 6,500 gain.

The outlook for U.S. equity markets was downbeat. The Dow Jones Industrial Average futures pointed to a loss of 0.5%, S&P 500 futures indicated a drop of 0.45%, while the Nasdaq 100 futures shed 0.55%.   

Later in the day, the U.S. was to publish official data on consumer price inflation, as well as reports on foreign investment, industrial production and manufacturing activity.

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