Investing.com - European stocks were sharply lower on Monday, as ongoing euro zone debt concerns and the effects of the European crisis on global growth weighed on investor confidence.
During European morning trade, the EURO STOXX 50 tumbled 1.48%, France’s CAC 40 plunged 1.28%, while Germany’s DAX 30 plummeted 1.50%.
Concerns that the euro zone’s debt crisis is creating a drag on global growth weighed, following a string of data late last week which indicated weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity throughout the single currency bloc.
In addition, Spain's government was expected to make a formal request for aid for its banking sector later in the day, after reports on Thursday indicated that Madrid would need a rescue package of as much as EUR62 billion.
Investors also remained cautious ahead of a European Union summit due to begin later in the week, amid hopes progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt.
Financial stocks were sharply lower, led by Italian lender Unicredit, down 3.20%, while Spain’s BBVA and Banco Santander tumbled 1.83% and 1.91% respectively.
France’s Societe Generale and BNP Paribas also added to losses, with shares plunging 1.74% and 1.50%, while Germany’s two biggest lenders, Deutsche Bank and Commerzbank, plummeted 2.14% and 1.07%.
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.”
Meanwhile, Nokia saw shares dive 6.22%, 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 0.62%, weighed by sharp losses mining stocks.
Mining giants Rio Tinto and Bhp Biliton tumbled 1.28% and 0.71% respectively, after UBS downgraded earnings estimates for both companies by 4% due to Australia’s mining and carbon taxes.
Copper producers were also on the downside, as shares in Xstrata and Kazakhmys both declined 1.02%.
Meanwhile, U.K. lenders tracked their European counterparts lower. Shares in Lloyds Banking plunged 0.96% and Barclays slumped 0.52%, while the Royal Bank of Scotland and HSBC Holdings retreated 0.53% and 0.28% respectively.
Elsewhere, shares in Irish airline company Aer Lingus Group rose 0.71% 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 pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.64% decline, S&P 500 futures signaled a 0.70% drop, while the Nasdaq 100 futures indicated a 0.57% loss.
Later in the day, the U.S. was to release official data on new home sales.
During European morning trade, the EURO STOXX 50 tumbled 1.48%, France’s CAC 40 plunged 1.28%, while Germany’s DAX 30 plummeted 1.50%.
Concerns that the euro zone’s debt crisis is creating a drag on global growth weighed, following a string of data late last week which indicated weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity throughout the single currency bloc.
In addition, Spain's government was expected to make a formal request for aid for its banking sector later in the day, after reports on Thursday indicated that Madrid would need a rescue package of as much as EUR62 billion.
Investors also remained cautious ahead of a European Union summit due to begin later in the week, amid hopes progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt.
Financial stocks were sharply lower, led by Italian lender Unicredit, down 3.20%, while Spain’s BBVA and Banco Santander tumbled 1.83% and 1.91% respectively.
France’s Societe Generale and BNP Paribas also added to losses, with shares plunging 1.74% and 1.50%, while Germany’s two biggest lenders, Deutsche Bank and Commerzbank, plummeted 2.14% and 1.07%.
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.”
Meanwhile, Nokia saw shares dive 6.22%, 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 0.62%, weighed by sharp losses mining stocks.
Mining giants Rio Tinto and Bhp Biliton tumbled 1.28% and 0.71% respectively, after UBS downgraded earnings estimates for both companies by 4% due to Australia’s mining and carbon taxes.
Copper producers were also on the downside, as shares in Xstrata and Kazakhmys both declined 1.02%.
Meanwhile, U.K. lenders tracked their European counterparts lower. Shares in Lloyds Banking plunged 0.96% and Barclays slumped 0.52%, while the Royal Bank of Scotland and HSBC Holdings retreated 0.53% and 0.28% respectively.
Elsewhere, shares in Irish airline company Aer Lingus Group rose 0.71% 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 pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.64% decline, S&P 500 futures signaled a 0.70% drop, while the Nasdaq 100 futures indicated a 0.57% loss.
Later in the day, the U.S. was to release official data on new home sales.