Investing.com - European stocks were sharply lower during early European trade on Monday, as growing concerns about a full-scale sovereign bailout in Spain dragged down shares in banks and miners.
During European morning trade, the EURO STOXX 50 sank 1.8%, France’s CAC 40 dropped 1.75%, while Germany’s DAX 30 tumbled 1.4%.
Concerns that Spain may require a full bailout mounted 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.
The yield on Spanish 10-year bonds rose to a record 7.53% Monday, well above the critical 7% threshold widely considered unsustainable in the long run.
In addition, fears over a Greek exit from the euro zone resurfaced, as Athens requested more time to meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
German media reported over the weekend that the International Monetary Fund may cut off aid to Greece, making the country’s insolvency in September more likely.
Shares in Spain’s largest lender Banco Santander lost 3.6%, while BBVA dropped 4.5%.
Italian lenders also contributed to losses, as the yield on Italian 10-year government debt rose to 6.41%. Intesa Sanpaolo saw shares plunge 5.1% while Unicredit tumbled 4.75%.
Elsewhere across the sector, France’s BNP Paribas and Societe Generale fell 4.45% and 4.1% respectively, while Germany’s Deutsche Bank declined 3.8%.
On the upside, shares in consumer electronics manufacturer Royal Philips Electronics surged 6.4% 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 1.55%, as miners came under pressure by the uncertain global outlook and by falling commodity prices.
Mining giants BHP Billiton and Rio Tinto lost 2.7% and 2.4% respectively, while shares in copper producer Xstrata declined 3.1%.
Financials were lower as well, with Royal Bank of Scotland retreating 3.65%, Barclays falling 2.6% and Lloyds Banking Group losing 2.95.
In the U.S., equity markets pointed to a broadly lower open, as investors focused on Spain’s debt woes while awaiting earnings from fast food giant McDonald’s ahead of the open.
The Dow Jones Industrial Average futures pointed to a loss of 0.8%, S&P 500 futures signaled a decline of 0.8%, while the Nasdaq 100 futures indicated a drop of 0.85%.
Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.
During European morning trade, the EURO STOXX 50 sank 1.8%, France’s CAC 40 dropped 1.75%, while Germany’s DAX 30 tumbled 1.4%.
Concerns that Spain may require a full bailout mounted 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.
The yield on Spanish 10-year bonds rose to a record 7.53% Monday, well above the critical 7% threshold widely considered unsustainable in the long run.
In addition, fears over a Greek exit from the euro zone resurfaced, as Athens requested more time to meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
German media reported over the weekend that the International Monetary Fund may cut off aid to Greece, making the country’s insolvency in September more likely.
Shares in Spain’s largest lender Banco Santander lost 3.6%, while BBVA dropped 4.5%.
Italian lenders also contributed to losses, as the yield on Italian 10-year government debt rose to 6.41%. Intesa Sanpaolo saw shares plunge 5.1% while Unicredit tumbled 4.75%.
Elsewhere across the sector, France’s BNP Paribas and Societe Generale fell 4.45% and 4.1% respectively, while Germany’s Deutsche Bank declined 3.8%.
On the upside, shares in consumer electronics manufacturer Royal Philips Electronics surged 6.4% 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 1.55%, as miners came under pressure by the uncertain global outlook and by falling commodity prices.
Mining giants BHP Billiton and Rio Tinto lost 2.7% and 2.4% respectively, while shares in copper producer Xstrata declined 3.1%.
Financials were lower as well, with Royal Bank of Scotland retreating 3.65%, Barclays falling 2.6% and Lloyds Banking Group losing 2.95.
In the U.S., equity markets pointed to a broadly lower open, as investors focused on Spain’s debt woes while awaiting earnings from fast food giant McDonald’s ahead of the open.
The Dow Jones Industrial Average futures pointed to a loss of 0.8%, S&P 500 futures signaled a decline of 0.8%, while the Nasdaq 100 futures indicated a drop of 0.85%.
Neither the euro zone nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in Europe.