By Sara Sjolin, MarketWatch
Banks bear the brunt of the selloff
European stock markets fell sharply Tuesday, with most bank
shares struggling as fears of a global economic slowdown
persisted.
The Stoxx Europe 600 index fell 2.5% to 307.74. It had opened
modestly higher, then fell by as much as 0.8%, before darting
between losses and gains. The index on Monday dropped 3.5%
(http://www.marketwatch.com/story/european-stocks-drop-to-15-month-low-2016-02-08)
and closed at the lowest level since October 2014.
Richard Perry, market analyst at Hantec Markets, said there was
not one specific catalyst behind the selloff, but a range of
factors.
"Concerns about global growth slowing down is the usual excuse,
whilst the $100 billion reduction in Chinese FX reserves is also a
red warning light. However, it is just a negative swarm of bear
pressure through markets that is a real concern," he said in a
note.
"Equity markets are losing key levels of support, and until
there is something tangible for investors to hang a positive
argument on (such as signs of economic improvement, or perhaps a
bullish signal on the oil price), it is difficult to see what will
stop the malaise," he added.
Germany's DAX 30 index , which slipped into bear territory on
Monday, shed 2% to 8,826.12, while France's CAC 40 index gave up
2.7% to 3,970.61. The U.K.'s FTSE 100 index lost 1.5% to
5,611.14.
The downbeat trading mood in Europe was buttressed by data
showing an unexpected drop in German industrial production
(http://www.marketwatch.com/story/german-output-exports-drop-in-december-2016-02-09)
in December, another sign that Europe's largest economy ended 2015
on a weak note.
In Asia, Japan's Nikkei 225 tanked 5.4%
(http://www.marketwatch.com/story/nikkei-sharply-down-on-banking-energy-woes-2016-02-08),
as investors grappled with fears of global economic weakness.
China's markets are closed for the Lunar New Year holiday.
Banks: Shares of Deutsche Bank AG were down 3.4%, after losing
9.5% of their value on Monday. John Cryan, the co-chief executive
of the German bank, sought to reassure employees
(http://www.marketwatch.com/story/deutsche-bank-co-ceo-cryan-says-bank-rock-solid-2016-02-09)
about the bank's finances in a letter Tuesday. In the letter,
posted online
(https://www.db.com/newsroom_news/2016/ghp/a-message-from-john-cryan-to-deutsche-bank-employees-0902-en-11392.htm),
Cryan said that while the bank would likely raise legal provisions
this year, the lender "remains rock-solid."
Shares of Swedbank AB (SWED-A.SK) slid 7.6% after the Swedish
lender, in a surprise move, said it was replacing Chief Executive
Michael Wolf, with immediate effect
(http://www.marketwatch.com/story/swedbank-shares-fall-as-ceo-is-ousted-by-board-2016-02-09).
Other banks were also getting hit, continuing sector slump
fueled by concerns over the impact of low oil prices, negative
interest rates and weak economic growth. The Stoxx Europe 600 Banks
Index dropped 4.8%, heading for its lowest close since August 2012,
according to FactSet data.
(http://www.marketwatch.com/story/why-a-selloff-in-european-banks-is-ominous-2016-02-07)Credit
Suisse Group AG (CSGN.VX) moved down 8.1%, and UniCredit SpA
(UCG.MI) dropped 5.6%. UBS Group AG (UBS) fell 5.6%, and Banco de
Sabadell SA (SAB.MC) gave up 6.5%. Greek banks slumped, with
Eurobank Ergasias SA (EUROB.AT) sinking 14%.
Read: Why a selloff in European banks is ominous
(http://www.marketwatch.com/story/why-a-selloff-in-european-banks-is-ominous-2016-02-07)
However, shares of Svenska Handelsbanken AB were up 2.5% after
the lender said profit surged 35%
(http://www.marketwatch.com/story/handelsbanken-profit-up-35-lifts-dividend-2016-02-09)
in the fourth quarter.
Other movers: Shares of Pandora AS (PNDORA.KO) slumped 9%, even
as the Danish jeweler raised dividends by 44%
(http://www.marketwatch.com/story/pandora-ups-dividend-44-to-launch-share-buyback-2016-02-09)
and launched a share buyback program.
On a more upbeat note, shares of Vestas Wind Systems AS (VWS.KO)
were up 2.8% after a well-received earnings report
(http://www.marketwatch.com/story/vestas-hikes-dividend-as-profit-rises-54-2016-02-09-64853856)
from the Danish wind-turbine maker.
You're invited to Investing Insights: A global markets survival
guide
If you'll be in London on Tuesday, Feb. 23, you're invited to
join us for an evening of cocktails and conversation on the topics
of shifting monetary policy, growth, currencies, and the outlook
for investing opportunities and risks in European and global
markets.
Our panelists for the evening will include MarketWatch Personal
Finance and Investing Columnist Robert Powell; Mark Hulbert, Editor
of the Hulbert Financial Digest; and Virginie Maisonneuve, Founder
and Managing Director of Maisonneuve Global Advisors.
The event is free and open to the public, but reservations are
required. For more information or to RSVP for the event, please
email (MarketWatchevent@wsj.com).
(END) Dow Jones Newswires
February 09, 2016 09:19 ET (14:19 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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